The month of March has been comparatively turbulent for the equity markets as compared to the strong surges of the market in January as well as February. On the other hand, moving ahead towards April, stock markets continue on a firmly bullish path. Also seems poised to mark a further probable recovery.
As per the records till the end of March, the S&P 500 is very close to its all-time highs in September as well as remains bullish technically. The target index is over the edge of creating a ‘golden cross‘. A golden cross is a bullish technical chart pattern that arises after the fifty day moving average moves above more than 200 days moving average. Newly, this pattern was set by Dow Jones Industrial Average. Also, it had remained on the road so far for extending its robust rebound from the lows of December.
All of that said, yet, severe global risks along with the threat of slowing down economic growth continues to place heavy pressure over the equity markets. Some of the factors that continue to foster a much-undefined market situation overflow. Factors that are impacting the market include, ongoing political as well as economic turmoil around the process of Brexit. Worries regarding still unsettled U.S.-China trade deal discussions; significantly slowing down prospects of economic growth in Europe, the U.S., China, and several other regions as well as dipping government bond yields since central banks have turned out to be more and more dovish in line with lowering economic prospects across the globe.
Below is the list of key equity Charts that should be kept track in April:
S. 10-Year Treasury Yield
The Fed’s progressively dovish viewpoint as a result of concerns regarding dimming economic growth continues to pressure the U.S. 10-Year Treasury yields. This particular situation will probably worsen before it becomes better and might possibly see a further downside in April.
British pound vs U.S. dollar
The markets are closely knotted to the ups & downs (mainly downs) of Brexit discussions is the British pound that has been volatile in line with the shifting anticipations as well as the progress around the UK’s extraction from the European Union. The GBP/USD has been severely anxious due to Brexit. Presently, combining in a holding pattern across both its 50-day & 200-day moving averages, GBP/USD remains to be the pair of currency to observe since more developments about Brexit are to be revealed starting from April.
Shanghai Composite Index (SSEC)
As per the statistic till March last trading day, the Shanghai Composite is near to yearly highs. However still in a constricted pattern of consolidation. Moreover, with any breakout above this pattern happening in April, the index might next aim the price range of 3220.
One of the prime factors limiting the rise of gold has been a strong U.S. dollar. As gold usually denominates with the U.S. dollars, it mostly inversely associates with the rate of the greenback. Thus, even if the Fed continues to remain over its dovish trajectory, any constant dollar strength might place additional pressure on the value of gold, possibly weighing it down towards the level of $1250 once again.