Positive headlines about an experimental vaccine and positive comments from Fed Chair Powell have boosted investor confidence yesterday and so far today as bond markets were under pressure amid improving global equity markets. American biotech Moderna announced further progress in the development of a vaccine for the coronavirus. Today’s Powell speech is central, but there are also ongoing concerns about the escalating tensions between the US and China.
Reuters reported that Nasdaq will reveal new rules about the initial public offers expected to be made, making it more difficult for some Chinese companies to list on the stock exchange. Meanwhile, China’s announcement that it will levy an 80% rate on imports of barley from Australia also caused fears of new trade tensions.
The dollar has remained soft Against the background of improving global equity markets, supported by reopening economies, positive news about the development of a vaccine for the SARS Cov-2 corona virus and new commitments to further stimulate the Fed, ECB and other central banks as needed factors outweighing concerns about mounting tensions between the US and China and Australia and China. It is narrowly weighted USDIndex dropped to an all-time low of 11 days 99.37, extension of drop levels near 100.50 that has been seen the past day. Intraday, momentum indicators are negatively configured with MACD becoming negative and RSI at 30, while the lower Bollinger band line decreases, indicating an increasing negative bias. Subsequent support for USDIndex was seen at 99.25 and 99.00.
In contrast to the USD, we have seen US futures perform better since yesterday. However, at the European Open, the American future changed somewhat and now they are tightly mixed. USA500 after breaking the 2 month highs on $ 2,975. it turned 40 points lower. However, the positive momentum seems to continue for the time being, despite the downturn in the European session, as yesterday’s strong bullish candle strengthened the asset’s positive bias. If this persists, it could therefore send a stronger signal in the near future with the possibility of returning to pre-crisis levels.
Currently, the RSI technically supports a move above 50, suggesting that the downturn so far could be a correction of the OB assets. MACD lines turned slightly below the signal line, but they maintained the positive area while Stochastics dove into the OS area. If the laughter turns away from the OS area, it could confirm that the latest pullback is only a nearterm correction to yesterday’s 3% rally. Given the strength of these movements, an outbreak above 2990 is important because it might initially attract attention 3110 levels and later 3400 Surface. On the other hand, only a break under the 20 day SMA can signal the reversal of positive outlook for USA500.
As mentioned earlier, all eyes today are on Fed Chair Powell’s testimony about COVID-19. Today’s testimony can give a fresh boost to the stock market.
Fed Chair Powell testifies before the Senate Banking Committee today. His more positive view of the economy from the “60 minutes” interview on Sunday helped fuel a fuse among today’s stocks, and we suspect he will hold that view to the Senate while also emphasizing the need for fiscal measures . Perhaps he was disappointed with the “downbeat” characteristics of his comments last Wednesday and tried to change that bit, noting that he was already picking up the economy in the next quarter, although uncertainties about the path of the corona virus and possible treatments a full recovery well into 2021. He acknowledged that GDP could rise as high as -20% to -30%, with unemployment rates perhaps as high as 20% to 25%, but that does not mean that a new major depression is a likely outcome is. Most resonating for the markets, however, was his statement that “you want to bet against the US economy in the long and even the medium term. This economy will recover. ‘
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