US stocks reach an all-time high on stimulus optimism

The euro rose in early trading after reports of an upcoming business investment deal between the European Union and China. The two sides made progress on the key outstanding issue of workers’ rights in China. They aim to reach an agreement this week. This deal will help reduce tensions between the two sides and create better business opportunities. It comes less than a month after the EU published the transatlantic strategy that urged the US to work with it to meet the strategic challenge posed by China. 

US stocks reached their all-time high as the market reacted to the decision by Donald Trump to pass the $900 billion stimulus bill that was passed last week. The S&P 500 rose by 0.9%, passing the previous high reached earlier this month. The Nasdaq 100 index also rose by 0.7% while the Dow Jones rose by 0.2%. By signing the stimulus bill, the president unlocked funds to individuals, businesses, states and local governments. Meanwhile, the House of Representative passed another bill that will increase direct payments to individuals from $600 to $2,000. This bill will have difficulties passing the Senate.

The economic calendar will have minimal events today. The only major economic data to watch will be the consumer confidence data from the Conference Board that will come out at 15:00 GMT. The American Petroleum Institute (API) will also publish the weekly inventories data. In Sweden, the statistics office will publish household spending data. In Germany, SAP will be the company to watch as the firm revealed that it will take Qualtrics public in a deal that will value the firm at more than $12 billion. It acquired it in 2018 for $8 billion.

EUR/USD

The EUR/USD bounced back in overnight trading and reached the current level at 1.2240. On the four-hour chart, the price has moved above the 25-day and 15-day exponential moving averages. The pair has also formed an ascending triangle pattern shown in yellow. The signal and main lines of the MACD have also moved above the neutral level while the Average True Range (ATR) has continued to fall. Therefore, the pair will possibly continue rising, with the next target being at 1.2500.

GBP/USD

The GBP/USD pair is bouncing back after dropping to an intraday low of 1.3427 yesterday. It is trading at 1.3492, which is a few pips below the YTD high of 1.3624. On the four-hour chart, the pair is between the middle and lower lines of the Bollinger Bands while the Stochastic oscillator is slightly above the oversold level. The momentum oscillator has also continued to drop. Therefore, for today, the pair will possibly continue rising, with the next target being at 1.3500.

XAU/USD

The XAU/USD pair bounced back and is trading at 1,878. On the daily chart, the price has been above the ascending trendline that connects the lowest points since December 14. The price is also slightly below the 61.8% Fibonacci retracement level. It is above the 25-period and 15-period exponential moving averages. Therefore, the pair may continue rising so long as it is above the rising trendline.