The Oil is commanding the attention.
The broad stock market continued its long-term uptrend on Friday, as the S&P 500 index reached new all-time high above 2,200 mark, as investors’ sentiment remained bullish following presidential elections outcome. But yesterday all the markets closed with a relevant correction, and the S&P 500 sees its biggest decline since before the election, as financials retreat from this month’s winning streak waiting for OPEC producers prepared for a crucial meeting on Wednesday where they aim to agree on a production cut. On Monday, OPEC technical teams reportedly failed to agree on any details for the proposed cuts.
The OPEC meeting is commanding the attention of global financial markets this week, a possible cut deal has led bullish speculators to bid up the oil price, while skeptics have pointed to doubts about any effective deal being made. Naturally, if the market views the OPEC meeting and announcement as a disappointment, the oil price will fall significantly.
Today the European bourses were lower as investors focused on talks between OPEC members and the political uncertainty ahead of a key referendum in Italy. Crude and Brent are trading lower on the back of reports that OPEC’s technical experts have failed to agree the details of an oil output deal. This move lower reverses yesterday’s trend. Oil prices had closed 2 percent higher in US trade after Iraq’s Oil Minister told reporters he was confident OPEC could reach an agreement.
Meanwhile, President Mario Draghi of the European Central Bank warned Monday that Britain will feel the pain from Brexit before the euro zone. Draghi also asked for clarity over the upcoming negotiations.
The S&P 500 index has reached Friday another new all-time high at the level of 2,213.35. The nearest important support level is at 2,190-2,200, marked by previous level of resistance. The next important level of support remains at 2,170-2,180. The market continues to trade along its medium-term upward trend line. We still can see technical overbought conditions.
Graphics by: www.etoro.com
EUR/CHF is trading sideways. The pair is still way into a medium-term bearish momentum which should not last long as the SNB is defending the franc. Expected to bounce back way above 1.0800. Strong support is given at 1.0695. In the longer term, the technical structure remains positive. Resistance can be found at 1.0859. The ECB’s QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF.
Graphics by: www.etoro.com
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