Dollar Index and SP 500 Test Highs as Traders Pile into US Assets
Global capital is flooding into US markets as many traders return from a long holiday weekend.
Traders woke up to news that China may be reeling in its stimulus measures and that President Trump is vowing to reciprocate EU tariffs; despite these potentially ominous headlines, the US economy remains one of the few major countries seeing steady growth, and traders are piling into US assets as a result:
1) US Dollar Index Tests 10-Month Highs
As we noted last week, the dollar index has formed “…a large ‘ascending triangle’ pattern, which could foreshadow an explosive rally if the 97.70 barrier is eclipsed.” Rates peeked above that area at the start today’s US session, though the index has since dipped back below it. A daily close above the barrier, perhaps supported by a strong Q1 GDP report on Friday, could set the stage for another leg higher heading into the summer months.
Source: TradingView, FOREX.com
2) S&P 500 on Track for Record High Close
Meanwhile, December’s big swoon is now a distant memory for US equity traders. The total return index (including dividends) has already eclipsed last October’s record high, and the price index is on track for a record high close as we go to press. As we highlighted last week, year-to-date sector performance suggests a healthy bull market.
While Friday’s aforementioned GDP report will certainly impact trade in US indices, the more pressing data will be the ongoing results from the Q1 earnings season. In the next 24 hours, three of the six largest publicly-traded companies on the planet (Microsoft, Amazon, and Facebook) will all report earnings, and the outcome of those reports may determine whether the index can break sustainably above 2940 to usher in the next leg of the long-lived bull market.
Source: TradingView, FOREX.com
The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex, commodity futures, or digital assets, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to FOREX.com or GAIN Capital refer to StoneX Group Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.
Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account.
FOREX.com is a trading name of GAIN Global Markets Inc. which is authorized and regulated by the Cayman Islands Monetary Authority under the Securities Investment Business Law of the Cayman Islands (as revised) with License number 25033.
FOREX.com may, from time to time, offer payment processing services with respect to card deposits through StoneX Financial Ltd, Moor House First Floor, 120 London Wall, London, EC2Y 5ET.
GAIN Global Markets Inc. has its principal place of business at 30 Independence Blvd, Suite 300 (3rd floor), Warren, NJ 07059, USA., and is a wholly-owned subsidiary of StoneX Group Inc.
© FOREX.COM 2024