US feels Trump effect wearing off

27 October, 2017

Trumps tax plan seems to be going well in Congress with Republicans continuing to offer support, even though it will produce a deficit in the short to medium term. They are thinking the rise in GDP will off-set any deficits at all, but that will be something for future economists to work out. One thing is clear is that the Trump effect has worn off and we are seeing the effects on the markets. US pending home sales m/m came in weak at 0%  (0.5% exp), which is kind of normal due to the seasonal changes. We've also seen a number of large American corporates struggle to beat earnings in the latest 3rd quarter results. So tomorrow will be quite heavily focused on the US GDP results, where many are hoping for more robust growth, helping to justify the need to pass the tax bill to help corporations flourish in the USA.

One of the major movers on the markets is obviously the S&P 500 which has thus far been struggling on the third quarter results. Expectations had been higher after the Trump effect and thus far they've not been rewarded. In fact, we've ended up with a jumpy market and that can be seen clearly in the media of today - where markets are getting more and more cautious regarding recent rises. It has been clear the bears are there in the market, but every time they've rushed down as we've seen in the last two weeks the bulls have looked to punish them. But it shows that the sentiment is there to push things lower.

Looking at key levels for the S&P 500 it's clear that 2579 is the key level of resistance in the market thus far, with any higher movers likely to hit 2600 which will be acting as the psychological level. The 20 day moving average is also not being respected by the market, so it's unclear if traders will look to pay attention to it, if any at present as most are too far away. If we see further drops look for support at 2545, with the possibility of going lower to 2529 if we see a breakthrough. I do feel this area is very uncertain at present with the market starting to slide sideways until it finds direction. But those levels will be key for traders going and looking for the bears and bulls in this market.

One other key mover here is gold markets, thus far they've been falling but if we do see trouble in the US markets I would expect to see them jump back into action.

Thus far they've slowed down at support at 1267, with the potential to go further to 1247 in the long run. Unless we do see some US troubles, then it will be a case of gold looking to test those key levels of resistance around 1281 and 1295, with the potential to break into the high 1300's if things really go wrong.

Source link  
Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...

EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...

Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...

U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...

Dollar steady after Fed raises rates

In a widely expected move, the Federal Reserve has raised its key interest rate by 25 basis points for the third time this year. The central bank...

Markets prepare for Fed meeting

The resumption in concerns around trade uncertainties, the upcoming Federal Reserve policy meeting and general political risk element that...

Could the Dollar be turning the corner?

Currencies throughout Asia have welcomed the news that the Dollar has tumbled to a near 3-month low. A number of different currencies in the...

In the past 24 hours Bitcoin has lost -1.05% and reached $6536.2238113. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -7.87% and is now at $208.012957199. Have the most popular cryptocurrencies compared online 24/7.

Top Brokers offering Forex Market Analysis

Forex Currencies Forecasts

Top 10 Forex Brokers 2018

# Broker Review
6FIBO GroupFIBO Group84%