S&P 500 Retraces at Key Resistance, Hold Seng Faces a Pullback

S&P 500, HANG SENG INDEX, GOLD PRICE OUTLOOK:

• S&P 500 index futures hit key 3,200 resistance, correcting after
• Hold Seng index is ready to comply with decrease, buying and selling at 25,700 pre-market
• Gold costs pull again to US$ 1,800, general pattern stays bullish

S&P 500 Index Outlook:

US markets retraced sharply on Monday, with expertise shares going through profit-taking forward of the Q2 earnings season. World Covid-19 infections topped 13 million. US instances surged 1.86%, or 61okay in a single day. California shut indoor eating and bars after reporting a document variety of hospitalized coronavirus sufferers.

Anxiousness is constructing surrounding the US inventory market, which is buying and selling close to document highs, in face of a extreme recession and a second viral wave. Merchants are in all probability hesitant to take extra danger this week till earnings outcomes paint a brighter outlook.

Sector–clever, solely four out of the 11 S&P 500 segments closed mildly greater, whereas 7 had been sharply decrease. Info expertise (-2.12%), communication companies (-1.96%), shopper discretionary (-1.73%) and actual property (-1.63%) had been among the many worst performers whereas defensive healthcare (+0.53%), industrials (+0.42%) and financials (+0.32%) had been exhibiting resilience.

Q2 earning outcomes are kicking off this week, which may convey the market to a ‘actuality test’ that’s lengthy overdue. All 11 sectors are seeing their earnings to decline in Q2, with vitality (-149.9%), shopper discretionary (-118.9%), industrials (-88.9%) and financials (-55.2%) among the many hardest hit, in keeping with a report from FactSet. Large banks – JP Morgan, Citi and Wells Fargo – will launch their outcomes on Tuesday.

Singapore’s 2Q GDP figures dissatisfied markets. Town-state’s development declined by 12.6% year-on-year, and 41.2% quarter-on-quarter because the coronavirus pandemic hit the service sector roughly. The introducing of ‘Circuit Breaker’ measures helped to include the virus unfold on the expense of momentary financial ache. This might have some damaging impression on native inventory markets this week.

Supply: Bloomberg, DailyFX

S&P 500 Index –Technical Evaluation

The index has hit robust resistance at 3,200 and failed to interrupt it final evening. A ‘Bearish Engulfing’ candlestick sample suggests there might be extra consolidation within the days to come back. A right away help stage might be discovered at 3,118 – the 20-Day Easy Shifting Common (SMA). Nonetheless, the general pattern stays bullish inside the context of an ‘Ascending Triangle’ (chart beneath).

S&P 500 Index – Every day Chart

Hold Seng Index Outlook:

Hong Kong’s Hold Seng Index (HSI) inventory market benchmark may be going through a pullback within the face of US headwinds. The index has consolidated since final week because the coronavirus state of affairs within the metropolis has escalated rapidly. The Hong Kong chief government has introduced to close all indoor eating from 6pm to 5am the subsequent morning, and to shut all faculties. This might convey a second wave impression to the actual financial system.

Technically, the Hold Seng Index is consolidating at round 25,700, with rapid help and resistance ranges discovered at 25,000 and 26,00 respectively.

Hold Seng Index – Every day Chart

Gold Worth Outlook:

Technically, gold costs have damaged above an ‘Ascending Triangle’ fashioned since the finish of March, transferring greater since. Its general pattern stays bullish because the 10-Day, 20-Day and 50-Day Easy Shifting Averages (SMAs) fashioned golden crosses, sloping upwards.

Breaking out above US$ 1,750 resistance has opened the room for extra upside in the direction of subsequent resistance at US$ 1,800 after which US$ 1,872 (161.8% Fibonacci extension).

Gold Worth – Every day Chart

— Written by Margaret Yang, Strategist for DailyFX.com

To contact Margaret, use the Feedback part beneath or @margaretyjy on Twitter