Movements in financial markets from the last day cannot be reduced to a common denominator, which suggests that the magic of the end of the quarter was revealed a bit earlier. I would not waste time looking for reasons for US Dollar strength through declining debt yields, or explaining at the same time the indices and prices of gold, which are lowering at the same time. Traders will have a long weekend ahead as Friday is a day off for most major markets. Organizing portfolios before the end of the quarter have the right to come earlier, and flows on the shallow market are more visible. It is impossible to prepare for it, because there are many theories about the scale of reshuffles being held until the last moment, and to what extent they are made a few days earlier. If anything, then the risk of chaotic fluctuations should be thanked by the regulations of Basel III, which limited the spectrum of activities on the currency market to the banks with a negative effect on liquidity.
During the night Asia tried to control the negative emotions that came from the red session on Wall Street, but I think the market is looking for signs of optimism in bad places. The meeting of the leaders of China and North Korea was recognized as a positive signal, where Kim Dzong-Un confirmed his openness to the dialogue on the completion of the nuclear program. However, on the one hand, it reduces the geopolitical risk, on the other hand, it sends a signal to the US that now North Korea has China on its side. In time, as Trump's protectionism is mainly focused on China, Beijing's alliance with Pyongyang may negatively affect the results of May-planned talks on the US-North Korea line. Geopolitics and the trade war may remain important topics at the start of the new quarter, which will weigh on risky assets. Moreover, the latest macro data does not give solid support - yesterday the confidence indexes from Euroland and the US disappointed.
Let's now take a look at the SP500 technical picture at the H4 time frame. The market was too weak to even cover the gap down between the levels of 268.89 - 270.30, so now the bears might want to test the recent lows at the level of 258.40.The momentum is still below its fifty level, which is another clue supporting the bearish outlook.
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