USA500, Daily
US equities are somewhat firmer despite ongoing discord in the trade arena amid ongoing tit-for-tat protectionism between the U.S. and China, as tax-cut-fueled corporate earnings windfalls continue to cushion the blow. The US calendar starts off very quietly with mostly earnings, Treasury supply and headlines in focus, while inflation data will be on tap later in the week. Trump tweeted his expectations that tariffs will help pay down the US debt (perhaps, if they ultimately result in lower trade barriers and higher growth), though while they are being ratcheted up they may lead to slower potential growth and higher prices at home. The key European markets (UK100 and GER30) are both currently lower and trading under their 20 day moving averages. The US earnings season to date has shown over 80% of companies exceeding expectations, helping the US500 hold over its 20 day moving average from July 6. The next key resistance lies at 2845 the July high, R2 at 2850 and R3 at 2860. The January all-time high was 2875. Support comes in at the 20 day moving average (2812), the psychological 2800 and the 50-day moving average at 2775.
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Stuart Cowell
Head Market Analyst
HotForex
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