*The S&P500 jumped from its 50D-SMA again
*MPs come back with a vengeance as sterling falls off a cliff
The US futures and European markets are trading lower as investors aren’t buying the momentum from Wall Street. The US benchmark Indices closed strong on the back of the optimism that perhaps a trade deal can be done between the US and China. President Trump said yesterday that ideal is within reach and we are getting “closer and closer”. All of us have seen this film before, the president has given such false hopes before, and some argue, this is a typical Trump tactic to divert attention from the ongoing impeachment threat due to the result of the phone transcript between the US president and Ukrainian president.
The reality is that markets do want to see a trade deal between the US and China and no further tariff threats from the US. Every ray of light brings hope for investors and this results in stock markets moving higher; gold retracing from its recent highs and Treasury yields shooting up. To put things in perspective, the S&P 500 index closed higher with a gain of 0.62 percent and the Dow Jones soared 0.61 percent yesterday.
The 50-day SMA Is Providing The Lifeline For The Bulls
The most critical element with respect to the US indices is that pretty much all of them have bounced once again from their 50-day moving averages yesterday. Only time will tell if this particular moving average is supported by enough buyers.
Basically, we have a market which is struggling to break above the previous record highs due to the lack of bull momentum, however, the bearish sentiment isn't strong enough yet to push the price below the 50-day moving average, a critical signal for the bears to double down on their bets.
Biggest One-day Sell-off In Nearly Two Months
As for Sterling, it was another ugly day in parliament as MPs returned with vengeance and spared no moment to attack the British Prime Minister. What they actually ended up doing was creating an intense sell-off climate for Sterling. The currency fell like a rock yesterday and it suffered the biggest one-day sell-off in nearly 2 months. The last time the currency had over 1% fall in a day was back in July, to be precise, on the 29th of July.
Nonetheless, speaking from a technical perspective, it appears to us That a bottom could be in place and the reason that I'm saying this is because since the currency made Hello of 1.195 back on September 3rd, The price has been in an upward trend and as long as this low remains intact the path of least resistance is skewed to the upside.
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