• La recuperación alcista se mantiene intacta ya que el S&P 500 se mantiene por encima de 3000.
  • El nivel a batir para los compradores es la resistencia 3075.

 
Gráfico diario 


 
Después de la caída que tuvo lugar en febrero-marzo, el S&P 500 está rebotando fuertemente. El índice se mantiene en máximos de 2 meses y medio por encima de 3000 y la SMA principal en el gráfico diario. A medida que los alcistas se mantienen firmemente a cargo, el S&P 500 está observando la zona de precios 3075/3100, así como el nivel 3180 en el mediano plazo. Por otro lado, el soporte se puede ver cerca de los niveles 3000, 2960 y 2900 inicialmente.
 
Niveles técnicos

                                                    

 

  • El USD/CAD apunta al cierre más bajo desde el 6 de marzo, el más bajo desde la crisis del coronavirus.
  • El dólar estadounidense cae en general, DXY cae un 0,55%.

El USD/CAD perdió más de doscientos pips el lunes, y estaba a punto de registrar el cierre más bajo en casi tres meses. El par continuó cayendo durante la sesión estadounidense. Al momento de escribir, cotiza en nuevos mínimos en 1.3558.

Un dólar estadounidense más débil en todos los ámbitos empujó al USD / CAD a la baja. El dólar también perdió terreno frente a otras monedas de productos básicos. Los precios de las acciones en Wall Street fueron moderadamente más altos, y los precios del petróleo crudo estaban probando máximos de varios meses.

El DXY perdió un 0.55% cayendo por debajo de 98,00. Está cayendo por cuarta vez en los últimos cinco días de negociación, a punto de registrar el cierre más bajo desde el 13 de marzo.

Desde una perspectiva técnica, los indicadores intradía muestran lecturas de sobreventa pero no muestran signos de corrección. En el gráfico diario, se ve cómo el precio rompió el rango de negociación de 4 días y por debajo del promedio móvil simple de 100 días. El USD/CAD retrocedió a niveles cercanos a 1.3850 (mínimos de abril y mediados de mayo) antes de reanudar la caída.

Ahora el 1.3720/30 es un área de resistencia para el USD/CAD. Por otro lado, el próximo soporte crítico se encuentra en 1.3500.

USD/CAD

                                                                      

President Donald Trump is considering invoking a 213-year-old federal law that would allow him to deploy active-duty US troops to respond to protests in cities across the country, according to four people familiar with the internal White House discussions, according to NBC News.

The article states that Trump has warmed to the idea of using the Insurrection Act, adopted in 1807, to deploy troops as his frustrations mount over the protests in response to the death of George Floyd, a black man who was killed in police custody last week in Minneapolis.

Key notes

Some of the president’s aides have been encouraging him for days to invoke the act.

White House Press Secretary Kayleigh McEnany left open the possibility that the president could invoke the Act.

“The Insurrection Act, it’s one of the tools available, whether the president decides to pursue that, that’s his prerogative,“ McEnany said.

Governors can request the federal government send active duty troops to help in cases of civil unrest like the widespread protests plaguing US cities. But, so far, no state governors have requested active duty troops to assist and instead have relied on local law enforcement and National Guard soldiers and airmen on state active duty.

Governors often prefer the National Guard forces in these cases because they can legally perform law enforcement duties in the US, whereas troops on active duty cannot or they violate the Posse Comitatus Act.

Market Implications

There is brewing sentiment that Trump will lose the race to win the presidential elections this fall which is likely to be a negative for markets. Uncertainty will not favour the US stock markets, which is an appealing factor for the safe havens such as the yen and CHF.  This could be a weight for the USD. 

 

  • WTI holding in bullish territories, despite geopolitics. 
  • Oil producers may meet earlier than previously planned to extend cuts to supply.

Oil is trading at $35.62 after the close on Wall Street on Monday, having rallied from a low of $34.30 to high of $35.87bbls as the spot market diverges from futures. Markets were bullish on Monday and the Dow added 92 points or 0.4%, but, despite that, oil futures settled lower on Monday.

The concerns for Beijing-Washington tensions raised concerns over the prospects for crude demand. However, a report that major oil producers may meet earlier than previously planned with intensions to possibly extend the current crude output cuts helped to keep spot prices elevated. 

Short-term extension of OPEC+’s record supply cuts buoy market

A short-term extension of OPEC+’s record supply cuts, which are targeted to remove 9.7 million barrels per day is keeping the market buoyed. there is still no set date for the meeting so all ears are to the ground for the following sessions. 

“Amid continued signals of firming demand, the extension of the current cuts could provide further convexity to the recovery in energy markets. Crude fundamentals remain on a tightening path throughout the summer, which will see inventory builds make way for draws, and support our long WTI Dec20-Dec21 spread,” analysts at TD Securities explained. 

Notwithstanding, the extremely battered momentum signals combined with the vol shock in the complex has resulted in a continued short-tilt among trend-following funds, albeit marginal in size. We do not expect significant flow from this group of participants.

WTI levels

 

What you need to know on Tuesday, May 2nd:

 The American dollar was the worst performer, as tension mounts in the US after the death of a civilian in the hands of a police officer last week. Several states imposed curfews to halt protesters but got the opposite result, with riots extending throughout the country over the weekend. New York announced a curfew for Monday’s night as more unrest is expected.

The EUR/USD pair hit 1.1153, retreating from the level as local data showed economic contraction persisted in May. Investors remained cautious ahead of the ECB monetary policy decision and the US Nonfarm Payroll report, both scheduled later on this week.

In the UK, the focus remains on the post-Brexit relationship between the UK and the EU. UK PM’s spokesman said that the EU’s demands are “unprecedented” and that the Union needs to change its position. The EU and the UK will have another round of talks this week to try to reach a post-Brexit trade agreement.  EU officers doubt the kingdom actually desires an agreement.

The GBP/USD pair rallied to 1.2506, the AUD/USD pair flirted with 0.6800 while USD/CAD plunged to 1.3570, on the back of dollar’s sell-off. USD/JPY remained mute within familiar levels below 108.00.

Gold established around 1,740.00, up for the day. A weaker dollar kept it afloat, although the positive tone of equities limited its bullish potential.

Crude oil prices remained at the upper end of May’s range, recovering modest losses at the end of the day amid headlines indicating that Saudi Arabia is likely to increase the price for its oil bound for Asia in July.

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  • The Dow added 92 points, or 0.4%, at 25,475.
  • The S&P 500 index put on a modest 0.4% at about 3,056.
  • Nasdaq Composite Index climbed 0.7% at around 9,552.

Markets were bullish on Monday. US stocks managed to edge higher despite the prospects of the economic damage inflicted by the COVID-19, riots in the US and prospects of a flare-up in trade relations between the US and China. 

With there not being any action on the trade war front, consequently, US benchmarks ended higher as investors bet on the worst of the coronavirus damage has already passed. The Dow added 92 points, or 0.4%, at 25,475, the S&P 500 index put on a modest 0.4% at about 3,056, while Nasdaq Composite Index climbed 0.7% at around 9,552. 

Investors expect the economic data to show some improvement from April’s record weakness. At the same time, more stimulus is expected in July. The rioting in the US is expected to settle and with there being more bark than bite from the US President Trump with respect to China, markets took the opportunity to keep tracking higher.

However, there was some news that the Chinese officials were reportedly telling some state-owned companies to pause purchases of US agricultural goods while officials re-evaluate the situation something that could play out later in the week and weigh on optimism.

US data

As for US data, the US May manufacturing ISM edged up to 43.1 from April’s 41.5 as new orders lifted 4.7 pts to 31.8. “There was a very modest improvement in the labour market index to 32.1 from 27.5,” analysts at TD Securities explained.

That said, the latest Atlanta Fed GDPNow index probably better reflects the underlying state of the US economy than swings in the ISM. Its latest Q2 estimate fell to ‑51.8% saar last Friday, with real personal consumption expenditures contracting at a 56.5% saar rate. An absence of spending opportunities and belt tightening amid a surge in unemployment, which should reach close to 20% in May, saw the April personal savings rate spike to 33%.

DJIA levels

 

  • El índice del dólar estadounidense (DXY) está bajo presión en los niveles vistos por última vez a mediados de marzo.
  • DXY está probando un nivel de soporte clave cercano a 98.00.

  
Gráfico de 4 horas


 
El DXY cayó a la zona de soporte 97.80/98.00 comenzando la semana bajo presión. Como el movimiento a la baja podría agotarse, no está claro hasta dónde puede bajar el índice del dólar estadounidense. Sin embargo, si DXY puede encontrar una base cerca de los niveles mencionados, el índice podría rebotar. Por otro lado, una ruptura por debajo de 97.80/98.00 puede enviar el índice hacia los niveles 97.50 y 97.00 en el mediano plazo, mientras que la resistencia podría verse cerca de los niveles 98.50, 98.70 y 99.00.
   
Niveles clave adicionales

                                                   

  • The bullish recovery stays intact as the S&P 500 holds above the 3000 mark.
  • The level to beat for buyers is the 3075 resistance. 
 

S&P 500 daily chart

 
Following the Corona crash which took place in February-March, the S&P 500 is bouncing up sharply. The index is holding in 2.5-month highs above the 3000 mark and the main SMA on the daily chart. As bulls stay firmly in charge, the S&P 500 is eyeing the 3075/3100 price zone as well as the 3180 level in the medium-term. On the other hand, support can be seen near the 3000, 2960 and 2900 levels initially.
 
   

Additional key levels

 

Gov. Andrew Mark Cuomo has said, “There’s going to be a curfew in New York City that we think could be helpful.” “More importantly,’ he said, “there is going to be an increase in the force in NYC.” (The number of police on duty tonight will double, from 4k to 8k).”

Cuomo said this on a radio interview and that the curfew will be in effect from 11 PM to 5 PM.

Meanwhile, the cause of death in the killing of George Floyd was ‘mechanical asphyxia’ and it was a homicide, according to doctors who performed the independent autopsy, according to Reuters News. 

Market implications

Despite the rioting, US stocks climbed on Monday and followed suit of their counterparts in Asia. Bulls are relying and banking on more stimulus in July while the hopes that the worst of the economic damage inflicted by the COVID-19 pandemic may have already passed. Stocks are still seen as a bargain compared to pre virus highs and a long term investment. 

 

 

  • Risk-on conditions supported silver to weekly resistance. 
  • Stars align and XAG/USD bears looking for a solid entry in counter-trend trade.

The price of silver has gone from strength to strength as the US dollar weakens, stocks edge higher and investors position for economic recovery. Consequently, we have seen a rebound in industrial demand. At the time of writing, XAG/USD trades at $18.3063 having rallied between a range of $17.8706 to a high of $18.3895. 

US President Donald Trump’s address on China and strong words were more bark than bite, so financial and commodity markets responded in kind. With there being no additions to what the market had already expected to hear from Trump, nor any implementation of trade action that would have otherwise limited the resurgence in commodity demand, industrials and silver have surged at the start of this week.

Explosive performance in silver

Equity prices continue to climb and the overall sentiment in markets has dented the USD, extending its positioning to the downside in both the futures and spot FX space. That being said, “risks are growing as US-Sino tensions simmer, as highlighted by Beijing’s reported ‘pause’ of US agricultural imports,” analysts at TD Securities note.

“Recovery in commodity demand, combined with rising investment flows in precious metals has created the set-up for explosive performance in silver. Speculative interest remains low, despite a noteworthy increase in long interest over the past weeks, which highlight the increasing interest in the metal. Platinum could also see a further increase in CTA length as upside trend signals continue to firm.”

Silver levels

At this juncture, both the DXY and XAG/USD are testing weekly levels and a pullback could be on the cards. For silver, a 38.2% Fibonacci retracement of the latest impulse falls in at 17.7530 while a mean reversion takes the metal all the way back to the prior impulses highs and resistance, a level which if supports will open the case for the next leg higher.

The 50% reversion level is located at 17.5574. However, the shorter-term conditions remain bullish with MACD above the zero lines on both the 4 and 1 hour time frames. Should the said support fail to hold, the 38.2% Fib of the 18th March lows is located at 15.8127, below prior support of 16.52 and 16.80 which meets the 23.6% of the said bull run.