Today in the middle of European session, the market sentiment is somewhat between two marks «positive sentiment» and «slight positive sentiment». In short, markets are in limbo, waiting for news on FOMC, payroll data due later this week and US-China trade talks starting on Wednesday. Yesterday with the start of the week markets failed to retain positive sentiment initiated on Friday- American markets ended the day deeply in the red. The trigger for sale-off was US criminal charges against China's Huawei Technologies, escalating the US-China uneasy relationship. This development is likely to undermine prospects for U.S.-China trade talks. Well this is a type of US administration distinctive sign as carrot and stick tactic is the favorite one for D.Trump.
However, despite higher risks, no significant changes happened in global market so far. Speaking of US equities, since the beginning of the year, we tend to use a very interesting and quite simple gauge of market sentiment. It is SP 500 strategical level 2600. Today SP 500 is traded around 2640 points and on Monday the market closed the day on 2643- 40 points above the designated level of market confidence for US economy.
Today futures for US equities are traded slightly in the green trying to develop positive dynamic. European exchanges are in plus as well. Pan European equity gauge –DAX is gaining up to 0.17%. Globally speaking after Monday sell-off there are conditions for market upward adjustment and we will likely Wall-Street start in the green. US financial minister Mnuchin tried to support the markets expressing hopes that parties would reach the agreement. However looks that in reality two sides are as far from agreement as in the end of the last year.
Elsewhere, US corporate season is keeping the pace. Today markets will focus upon Apple earnings and no doubt, that numbers would trigger higher volatility in equities. It is interesting enough that exactly one month ago Apple warned that the company would miss its targets amid weak sales in China.
Today American regulator begins its two days meeting, as investors will focus on signals of further monetary course and US economy estimates. No rate-hike is expected this time in current conditions.
On FOREX market, American dollar shows signs of technical oversold conditions. On Friday, US dollar index reached 95.45 points, but yesterday's trading sent quotes lower to 95.30. This strong support coincides with significant levels in other FX market. We can expect a local correctional pullback on the US dollar index. EUR/USD mini rally stopped around 1.1440, as market moved to the expected technical pullback. Immediate support is located in the area of 1.1420 and further down in the area of 1.1405-1.1395. British pound was able to settle around 1.3140 and shortly before the start of the US trading session, the market returns to a local maximum 1.3200. Another market leader today is the New Zealand dollar.
Gold market remains in the global spotlight. On Friday, gold shifted to growth and updated local highs. Today, gold quotes continue to gain, the market is trading around eight monthly highs. The oil market is trading without significant changes. Brent quotes stopped around $ 60 dollars a barrel.
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