17.01.2022: US stocks going through downward correction (S&P500, DXY, USD/CAD, BTC/USD).
Hi, dear traders! In this video, you will find out about sentiment among American consumers, a correction in the US stock market, the reasons behind the US dollar’s weakness, and how the Fed’s dovish rhetoric has to do with it. Now let’s discuss everything in detail! On Friday, the major US stock indices closed mixed. The Dow Jones was 0.6% down on Friday, but the Nasdaq closed 0.6% up. At the end of the last week, market participants got to know retail sales data for the US. The Commerce Department reported a decline of 1.9% in December, much more than expected. Excluding cars, sales dropped by 2.3%. In a separate report, the consumer sentiment index by the University of Michigan went down to 68.8 from 70.6 in the previous month. Apparently, soaring consumer inflation took a big bite out of spending. Meanwhile, exchange floors are trading quietly and the US stock market is going through a downward correction. The S&P 500 closed with a 0.1% uptick last week below a 50-day moving average. Today futures on the S&P 500 are trading higher at nearly 4,662. So, stock investors could be poised to sell the index. The expected corridor is seen between 4,640 and 4,670. Following a plunge on January 11, the US dollar index made the first notable bounce. Nevertheless, the overall trajectory of the greenback is still bearish. The index will hardly overcome the level of 96.00, trading inside a narrow corridor between 94.90 and 95.50. Currently, the index is trading at about 95.19. The greenback has been weighed down by clear reasons. Amid the red-hot annual CPI at 7%, the highest in the last 4 decades, Fed’s Chairman Jerome Powell sticks to the dovish stance on raising interest rates. To gain ground, the US dollar needs some clarity from the US Fed on the timeline for rate hikes. Analysts reckon that the banking sector will be one of the few sectors to benefit from higher interest rates. For example, one of the largest US banks, JPMorgan, reported in financial records that its profits shrank 14% to 10 billion dollars in the fourth quarter. However, this figure is higher than analysts’ forecasts. The bank’s revenue remained the same, having gained 0.6% to stand at 30 billion dollars. Last week, the USD/CAD pair was fluctuating following the greenback’s moves. Nevertheless, the rally in the oil market pushed the currency pair down. Meanwhile, crude oil is trading at the highest levels of 2021 that also match the highs of 2018. The US dollar is slipping across the board. In this context, the USD/CAD pair is likely to continue trading lower. Currently, it is trading at about 1.2520. The expected corridor is seen between 1.2500 and 1.2580. Perhaps some publications tonight will have an impact on the loonie such as manufacturing shipments and the Bank of Canada’s overview of business prospects. After a slump 10 days ago, Bitcoin lacks buyers at higher levels. Since its crash, the digital token is trading is a tight range between 40,850 and 44,000 dollars. Bitcoin was oscillating in a narrow range over the weekend. On Monday, it is drifting down towards 42,000. Currently, it is trading at about 42,576. The nearest support is seen at 40,000 and resistance – at 70,000. That’s all I wanted to tell you about the latest news on American trading floors on Monday, January 17. Thank you for watching! Feel free to leave your comments! See you tomorrow!
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