US equities jump sharply

8 December, 2016

US markets saw a massive rise today as the Dow was up 300 points and the S&P 500 was up 29 points showcasing that investors believe the advent of Trump will have a positive effect on the US economy. This result while being based around the politics was further backed by the strong results the US market has been seeing with JOTLS job openings up to 5.53M - a reversal on a drop in the last 2 months. However this may also be a seasonal shift with many jobs created around the busy Christmas shopping season. Consumer credit was also much lower at 16.0B (18.8B exp) after two very large previous months where consumer credit saw large growth. For the most part though the US economy looks poised to make the most of the Christmas season and many are expecting trump to take the US economy that one step further in the New Year. It could be a hard landing for markets if he fails to deliver, but for now the market optimism seems ever increasing.

On the charts the S&P 500 has certainly reached higher and the market is looking for a solid resistance level to pause at and take profit. In the past, resistance levels in uncharted territory tend to happen around key psychological levels and in this case 2250 looks likely to be the hard line that will be tough to cross for the bulls. Beyond this the obvious next level above will likely be at 2300 and I would expect the market to take a breather until Trump looks to swing his economic might to help bolster the US economy. Any push lower to support is likely to find it though at 2183 or alternatively dynamic support on the 20 day moving average, which has been quick to push back any bearish activity as of late.

Across the pacific in the New Zealand economy  recent comments from the Reserve Bank of New Zealand have sparked up the market somewhat, as the governor of the RBNZ believes that the NZD has turned a corner and may be starting to retreat. However, the recent Global Dairy Auctions had its 4th consecutive jump in recent weeks and this was further backed by the ANZ commodity price index lifting 2.7% on the previous quarter, adding further fuel to traders seeking safety and yield overseas away from the turmoil.

The NZDUSD has been the major trading target and has so far managed to hold up firmly on support at 0.7113 as it looks to shrug off the bears and recent comments from the RBNZ. Right now it's even reaching outwards resistance at 0.7180 and the market will be looking to see if has the momentum and pace to continue further movements higher on the weaker USD. Despite the movements, the USDs run feels like it may not be over and more Trump economics could certainly see it moving rapidly against all the major and commodity currencies out there.


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