Jump in to know the key market events and trading ideas for this week!
What moves the market on May 25?
Investors are confused. They weigh the prospect of a soon recovery as economies are reopening against the growing US-China tension. Also, analysts anticipate the whole trading to be discreet with US and British markets closed for public holidays.
The risk-on mood still had a positive impact on stock indexes, such as S&P 500, Nasdaq and Dow Jones. S&P 500 has gained and approached the retracement level at 2975. If it crosses it, it will open doors toward the psychological mark at 3000. Support is at 2895.
Risk-on currencies are under pressure
Whereas, optimism around economic reopening is fading because of the lack of transparency in US-China relationships. Beijing decided to put security laws on Hong Kong, what was viewed negatively by the USA. Investors prefer safe-haven currencies to risk-on ones. AUD, NZD and GBP are moving down under pressure. Let’s look more closely at AUD/USD. It had been a strong upward trend since March 20. Nevertheless, the price has started falling on May 21. It’s may be just a correction. After the pullback to the support line at 0.649, it can move up again. Retracement is at 0.66. Support levels are at 0.649, 0.64 and 0.627.
USD vs JPY
The Japan’s government is expected to lift the state of emergency in Tokyo and its surrounding regions. The US dollar remains the most preferable currency among other safe-haven ones. It has even unbeaten the Japanese yen. USD/JPY has almost broken through the retracement level at 107.725. The next one is at 107.9. Support lines are at 107.35 and 107.1.
USD’s rally takes a pause, while riskier assets are modestly rising.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!