Stocks: the Bad news interfere with the growth
All week investors hold in the focus of talks China and the United States, during which the us imposed increased 25% on Chinese goods worth $200 billion that opponents have promised to give a response. However, officials of both countries say that the chance for the deal still remains.
And yet how far apart the statements of politicians with the actions of the governments causes an increase in the volatility of the markets. According to analysts at FxPro, the General mood at the end of the week, probably described by the old saying: “Buy the rumor – sell the fact”. That is, the actual tariff may even indicate a reversal of the hide, such as negative news is already incorporated in current quotations and investors are ready for them.
The stock market
On Friday, the Chinese exchanges we see between throwing a sharp downturn and growth. By the end of the Asian session this morning China A50 bounced from 12500, closed the week near 13000. Futures on the S&P500 has received support on the way down to 2850, after the initial decline.
From the technical analysis, it is important that S&P500 at the end of Thursday remained above the 50-day average. The loss of only 0.4% by the end of the day marked the victory of the bulls, in comparison with more impressive descent to 1.7% during trading hours. If today’s close of the us session we will see the rise above the MA50, which is 2860, it can become a strong signal for a reversal to growth. However, it is important to remember that news about trade deals the US and China can overcome the technical picture.
The dollar fell sharply on Thursday, calling the pair’s rise from 1.1190 up to 1.1250. Overall, the course is still within the downtrend, but since the end of April is moving from its lower border to the upper. At the moment, the resistance of the trading channel passes through 1.1270. At the same time, even earlier, 1.1255, the pair may run into a serious obstacle in the form of MA50.
Note that to gain a foothold above this line EURUSD trying since the end of February, but in vain. So to talk about the first signs of breaking the downward trend will be possible only after the completion of the week above these levels.
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