Stocks declined last week as inflation showed signs of sticking at current levels. This suggests that the Federal Reserve might not be ready to cut rates just yet. Additionally, there's tension in the Middle East between Iran and Israel. However, the situation seems to have eased in the past few days. This calming trend is also reflected in crude oil prices, which have returned to around $81 in recent trading sessions.
If crude oil continues to trade sideways in this range without further escalations in the Middle East, the stock market could stabilize. Meanwhile, metals might test lower supports. Gold, for example, has a solid support level at $2300. Cryptocurrencies have also experienced a notable recovery over the weekend, indicating potential upside following the halving. The dollar has slowed down a bit, but it could become volatile again due to upcoming US PMI and GDP data releases on Wednesday and Thursday. Therefore, it seems there's still time for the current correction to unfold.
Taking a look at the 4-hour time frame, we observe strong support around 105.50. If the price reaches that level, it could provide a good buying opportunity.
Grega