FX.co ★ 30.04.2024: USD to develop new rally today? Outlook for S&P 500, EUR/USD, and Brent crude

After a telephone conversation between the US President and the Israeli Prime Minister, hopes arose that some calm could come in the hottest spot in the Middle East. At least, the options for negotiations and even a truce between Israel and Hamas remain on the agenda.

As a result, global investors revise their sentiment. At the same time, the government of one of the leading Asian economies announced that it was ready to act around the clock on currency issues. But traders do not expect any specifics on forex interventions from the financial authorities.

Official data showing whether the interference actually took place will not be available until the end of May. The reports on foreign exchange reserves in Japan are based on that data. But it is already clear that one intervention may not be enough.

A day after the alleged intervention of the Japanese authorities, the yen had already lost some of its sharp growth against the US dollar. The day before, the yen weakened to about 160. The dollar/yen pair again found itself in the bullish trend, but was still trading somewhat lower today in the range of 156.0 to 157.6.So, a day could be left to wait until a new wave of the US dollar’s advance across the board. Today the US currency does not look weak. Its index is trading in the intraday corridor between 105.6 and 106.1. In turn, futures for the main stock index S&P 500 fell in the early New York session on Tuesday amid negative sentiment. After a moderate rise on Monday, Wall Street prefers to wait not only for the Fed’s policy decision, but also for official data on the American labor market.

Given that the Federal Reserve is focused on unemployment and job growth, these reports will shed light on future policy decisions. In the meantime, the S&P 500 is trading lower within a moderate range of 5,097 to 5,111. It seems that now it is the euro’s turn to benefit from inflation surprises and positive reports on economic recovery. As we can see, today the single currency caught a new impulse and finally rebounded from the level around 1.0700. As a result, it outperformed the stronger dollar and rose above 1.0730.

Thus, the euro extended the previous rally from overnight lows around 1.0689 and became the best performing currency not only in the dollar index basket, but also in the G10 and G20 baskets. But the euro’s rally did not last long. In the early New York session, the euro/dollar pair dropped quite sharply to trade in the range of 1.0700 to 1.0720.

So all risky assets, as well as oil prices, are set to trade lower in the next 24 hours. The benchmark Brent crude has already retreated today. As a result, its price slipped by more than a dollar in a few hours, having fallen from 88.8 dollars per barrel to below 87.6.

Along with the advancing US dollar, the prospects for an improvement in the political situation in the Middle East also put pressure on oil prices. Therefore, the intraday forecast for Brent crude suggests a decline within the corridor of 87.4 to 88.7 dollars per barrel.