Last day of May Brings us new Fears

Donald Trump strikes again. This time the victim is Mexico. That is not a new player in the trade wars but definitely timing is a surprising here as everybody thought that the deal with Mexico and Canada was already reached. Apparently not and new tariffs appear to be the new weapon against the influx of illegal immigrants. We will see how this will work out.

Gold is gaining and after the successful defense of the 38,2% Fibonacci, we are currently trying to break two dynamic resistances. Those resistances restrict the bearish correction from the top, so a breakout will be a good buy signal.

Next one is Crude, analyzed by us yesterday, where we said that this small bounce was not enough for the buy signal and that in order to get one, we need to see the breakout of the neckline. That breakout did not happen and instead of that, the price fell sharply lower. 58 USD/bbl support is gone, which changes the mid-term sentiment into a negative one.

Last instrument is SP500, which yesterday tested the horizontal resistance on the 2800 points. We said that it will be a good occasion to sell and this is precisely what happened. The price bounced and went down establishing new mid-term lows. With all this, the price action favors the short side of the market.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis