S&P500: $2 trillion might not be enough

The US stock market falls in the pre-opening, possible reaction of fear to the size of the aid package approved by Congress.
Yesterday the 23% level of the Fibonacci retracement system was conquered, level drilled down now.
Record-breaking market rise scored yesterday, daily gains not seen for almost a century.

Tomas Salles FXStreet

A few hours before the opening of Wall Street, the S&P500 is losing the levels it gained yesterday. This market is highly emotional, as demonstrated by the intraday volatility.

Yesterday's strong bullish rebound reached the 23.6% Fibonacci retracement level from historical highs for the S&P500. In the hours leading up to the opening, and despite the $2 trillion plan approved by Congress, the markets are losing levels and falling back with some intensity.

The MACD and DMS indicators in the daily range show that there is no bullish setup for the moment, but rather that yesterday was important but not sufficient.

On the 1-hour chart, the short and mid-term moving averages are losing their downward profile, while the SMA200 remains in a downward direction.

This setup leads us to expect, in the short-term scenario, an attempt to build a technical floor. This should be a fragile floor though, as long as the higher time frames don't improve its aggressive bearish profiles.

The MACD on the hourly chart shows clear intentions of a downward direction, while the DMS shows the bears trying to regain the lead for today's session.

The current market situation makes it advisable for traders to be cautious in any time frame. Excessive leverage or positions without reliable stop levels can lead to significant losses in either direction.

Author

Tomas Salles

FXStreet

Tomàs Sallés was born in Barcelona in 1972, he is a certified technical analyst after having completing specialized courses in Spain and Switzerland.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.