S&P 500 still below 200-day moving average – Where now?

Monica Kingsley Monicakingsley

S&P 500 didn‘t keep above NFPs highs, and Trump 80% China tarif „seems right“ message caused sell-the-news reaction just as expected. It was also one of shallow selling, and no bullish positioning ahead of the weekend to speak of. The dollar is also stuck in the key 100-101 zone – shouldn‘t it be higher given the tariff wars resolution on the horizon? For all the positive UK news, it‘s up to China and EU to turn this (long-term) expectation positive – things will not go as smooth as they did with the UK, and any good headline counts.

Yet, bonds aren‘t panicking, and stock market volatility is also reasonably constructive. As stocks struggle with the 200-day moving average for the time being, one has to look for more risk-on areas beyond paper assets.

80% grabs attention headline, but let‘s put it into the 60% pre-elections threat context – can US supply chains really, really reorient that fast? This 80% level will have to go down some more to make it workable for the US not just in the short-term. Some much more… So, caution and realization of the carrot hoopla Friday by stocks shouldn‘t be too surprising (defence of shallow pullback is a constructive sign for sure, and phase one deal announcement works great) – one has to look at bond market holding steady or looking to the exit door instead...

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Monica Kingsley

Monicakingsley

Monica Kingsley is a trader and financial analyst serving countless investors and traders since Feb 2020.

EUR/USD remains offered, challenges the 200-day SMA

EUR/USD adds to the current leg lower and comes just pips away from its significant 200-day SMA around 1.1580 as the NA session draws to a close on Thursday. The deeper drop comes in response to the intense advance in the Greenback, this time propped up by firm US data and higher US Treasury yields.

GBP/USD drops to four-week lows near 1.3360

Moving in step with other risk-sensitive peers, GBP/USD is attracting heavier selling and has slipped below the key 1.3400 support on Thursday to hit fresh four-week troughs. Cable’s decline reflects a firmer US Dollar as investors keep evaluating the latest batch of US data.

Gold remains offered just above $4,600

Gold is giving back part of its recent strong run, managing to bounce off earlier lows and reclaim the area beyond the $4,600 mark per troy ounce on Thursday. The pullback comes as the Greenback regains traction, Treasury yields move higher, and some profit-taking kicks in.