The outlook for US and European stock markets remains bullish as their upward trends remain intact, says Maxine Viemont of BNP Paribas. Meanwhile, Brent crude has now broken out of its consolidation phase and targets 119-127, but the euro remains under pressure with a downside target of 1.2750.
The interruption of a broadening top pattern in the S&P500 means that further gains are likely for the index in the months ahead, says Peter Lee at UBS. He also discusses if the super bull cycle in commodities has really ended and the continued bearish outlook for EURUSD.
A failed key reversal day last week continues the bearish stance for the euro following the completed double top earlier in the year. According to George Davis at RBC Capital Markets, a close below 1.3484 would signal a shift in sentiment and open the way for a decline to 1.3296.
Divergence between the S&P500 and the retail sector within it is a red flag that the market may be nearing a top, says Riccardo Ronco at Aviate Global. Although the trend in the overall market remains bullish for the present, the 52-week % spread of retail/S&P has fallen sharply since the start of the year.
An increase in NYSE margin debt, as the US stock market continues to rally, could be at a turning point suggesting a possible top in stocks, says Max Knudsen at ADS Securities.
The underlying trend of GBP/JPY remains very strong with consolidation under the 173.55/65 level increasing the potential for a strong upward breakout, says Martin Jones at Informa Global Markets.
The market remains bearish for 10-year gilts after reaching the target of 109.24, says Dmytro Bondar at RBS. However, as prices approach the lower Bollinger band, a bullish correction/consolidation should be expected but this will be followed by the return of downside pressure.
The uptrend in the S&P500 is still intact, according to Andy Dodd at Louis Capital Markets, despite recent calls of an approaching top in US stocks. Apart from Fibonacci levels, prices face no significant resistance levels going forward, he says.
Brent crude remains in a long-term consolidation pattern with declining highs putting the balance of risks on the downside, says Maxime Viemont’s team at BNP Paribas. Meanwhile, gold looks set to test its 12 year trendline a break of which would pave the way for a significant downward correction. He also discusses stocks, bonds and FX.
The S&P500 still has further to go towards the 1950 level before a correction is due, says Walter Zimmermann of United-ICAP. In his weekly technical price risk report, he also discusses the downside risks that exist for the 10-year Treasury yield and euro.