After the turbulent trade on Wednesday, the financial markets finally clung to the hope that a trade war between the US and China would be avoided through negotiations. A 180-degree turnaround on Wall Street helps in the Nikkei rally. USD/JPY wiped off by 107, but improvement in sentiment does not bring AUD and NZD to any good. The bounce of the US Dollar hits the price of Gold, which today falls below 1330 USD. The weakening of trading tensions positively reflects on the price of crude oil - WTI approaches 63.6 USD.
On Thursday 5th of April, the event calendar is light in important news releases, but the market participants should keep an eye on PMI Services data from across the Eurozone and UK, Trade Balance data from Canada and Unemployment Claims data from the US.
SP500 analysis for 05/04/2018:
The words of the White House economic adviser Larry Kudlow, according to which the US tariffs on Chinese goods are just a proposal that may never come into effect, sparkle the hope in the financial markets. This allowed the US stock market to drop in price increases, the SP500 ended the day with a 1.16% rise, which Nikkei (1.9%) followed overnight. The markets in China are closed.
Let's now take a look at the SP500 technical picture at the H4 time frame. The price is still trying to bounce higher from the low at the level of 254.64 and currently, the bulls have managed to hit the level of 264.60, which is above the short-term descending trend line (dashed black). The move looks strong enough to hit the level of 267.00 or even to fill the gap between the levels of 268.89 - 270.30. The momentum bounce above its fifty level in the oversold market conditions supports the short-term bullish bias.
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