Shares Peaking, Greenback’s Recovery Limited
US stocks have significantly gained, reflecting positive expectations about tax reform. Dollar also reacted with a lift, but its recovery is limited. DOW rose 0.40% at the maximum of 24922.68. Its long term uptrend is keeps unfolding towards 200% projection of 20379.55 to 22179.11 from 21731.12 at 25330.25. S&P 500 surpassed 2700 handle to 2713.06 high, lifting 0.64%. NASDAQ increased 0.84% at the maximum of 7065.53. Nikkei also closed over 2.6%, breaking 23300.
USD index hit the minimum of 91.75 but got back over 92 handle. Key long term support is at 91. The drop from 95.15 is seen as corrective. The index is heading closer to 100% projection of 95.15 to 92.49 from 94.21 at 91.55. Breach of 92.49 support turned resistance will become the first hurdle. 55 days EMA at 93.35 will be the second barrier. Downside acceleration will push the index through the 91 accumulation of support, which will in turn extend the downtrend from 103.82. And if that happens, the index would align another accumulation level near 84.5/85 and then form a bottom.
Yesterday, we got the protocol of Fed December meeting. Members’ economic projections were rather sanguine. They also assume that corporate tax cut will improve consumer spending. Japan PMI manufacturing was lowered to 54 last month. China Caixin PMI services surged from 51.9 to 53.9. Today, Britain will announce PMI services, M4 and mortgage approvals, Eurozone will present PMI services final, the US will release ADP employment, jobless claims and Challenger job cuts featured and Canada will show IPPI and RMPI.