• Dragostin Kozhuharov

US Indices Move Higher After Fed announces further measures

The SP500 futures closed the more than 40 point gap with which they opened last night, after the Federal reserve announced further stimulus. The June SP500 Futures were trading above 2300 before the US open. The Central bank is going to do open-ended treasury and mortgage backed securities buying in the amount that the market needs.*

SP500 June Futures Chart


Next potential resistance for the SP500 lies at the 2400 handle. Something to keep in mind is that Steve Mnuchin said that Congress is close to a deal on stimulus package, and traders will be on the lookout for potential announcements on this. **


The US dollar reacted by selling off from it's highs as can be witnessed by the Dollar Index Chart below. This caused moves everywhere - from indices to commodities, as the USD shows that it has so far been the main safe haven in this crisis.



The USD move up, since the virus became the main headline has however been halted for now. The Dollar index chart shows resistance forming around 103.


Whether the stimulus is going to provide further upside or downside for the dollar remains to be seen, but if equities and commodities are to find potential relief and move to the upside, a weaker US dollar might be needed.


sources:


*https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm


**https://www.cnbc.com/2020/03/23/mnuchin-says-congress-is-very-close-to-a-stimulus-agreement-and-must-get-it-done-today.html?__source=newsletter%7Cbreakingnews

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