The S&P500 continued to move higher on Tuesday surpassing record levels it reached on the previous days. Analysts said the recent all-time highs are due to a largely positive earnings season that are taking place currently, positive economic releases from the US and progress in U.S.-China trade talks. Some of the most important market movers from yesterday include Alphabet Inc. (the parent company of Google) shares dropped 8.28% enacting its worst decline since January 2012, after the company announced its slowest revenue growth in three years. While Apple Inc. was down 2% on normal trading hours due its drop in quarterly earnings. However Apple Inc. is said to have jumped 5% on after hour trading on positive comments from Tim Cook the tech giants CEO and its CFO. More emphasis may be placed on stocks as we have a busy week ahead.
The S&P 500 gained 17.5% since the end of December. On the past Friday the Index managed to break above the (S1) 2934.20 support level of which it had tested many times in the previous week. Yet it managed to stabilize above that level moving against many analysts’ expectations that it would correct lower. The index’s current course maybe sending the signal that it’s moving in new era, breaking higher and higher, as US companies expand their growth and become even more dominant around the globe. However if the bull run is to continue we may see the index reach the (R1) 2965 resistance level and aim even higher for the (R2) 2980 resistance line. In the opposite direction the Index may drop lower to the (S1) 2934.20 support level and move lower for the (S2) 2911.30 support line. However for the time being we see the Index moving in a sideways movement between the (R1) 2965.00 resistance level and the (S1) 2934.20 support line.
All eyes on the FOMC Meeting
The U.S. dollar was down against its major counterparts on Tuesday, falling for a third session in a row. Today the FOMC is expected to announce its interest rate decision, at 18:00 (GMT). The bank is widely expected to remain on hold keeping the current level of +2.50%. Fed’s Funds Futures support such a notion as they provide currently a 97.9% probability for such a scenario. We could see the bank maintaining a wait and see position as the data relating to the US economy seem to be sending mixed signals. Please note that volatility for the greenback could be extended throughout Jerome Powell’s press conference later on.
The dollar index dropped lower yesterday as the greenback maintained its bearish momentum ahead of today’s FOMC meeting. In the past 3 trading sessions the USD index moved lower and took back the gains it made previously reaching yearly highs. Even though the Index remains at high levels we could see it move higher surpassing the (R1) 97.27 resistance line and aiming for the (R2) 97.50 and the (R3) 97.80 resistance barriers. On the contrary, should the index come under the selling interest of the market, we could see it breaking the 96.91 (S1) support line and aim for the 95.50 (S2) support level. Please note, the index may come under significant volatility during tonight’s FOMC meeting.
Other economic highlights, today and early tomorrow
In the European morning, we get from the UK the Manufacturing PMI for April. In the American session, we get ADP National Employment for April and the ISM Manufacturing PMI for April. Later on, the EIA Crude oil inventories weekly reading is to be released and towards the end of the US session we get the FOMC Interest Rate Decision. As for speakers please note that ECB’s De Guidos speaks and BoC governor Poloz speaks. Please note due to the fact that 1st of May is a global holiday we may see thin trading prevailing in the financial markets.
US500 H1
Support: 2934.20 (S1), 2911.30 (S2), 2892.15 (S3)
Resistance: 2965.00 (R1), 2980.00 (R2), 3000.00 (R3)
USDIndex Daily
Support: 96.91 (S1), 96.50 (S2), 96.10 (S3)
Resistance: 97.27 (R1), 97.50 (R2), 97.80 (R3)
