Trump Acquitted, U.S. Stocks Tick Higher

Posted Thursday, February 6, 2020 by
Shain Vernier • 1 min read

Late-Wednesday afternoon brought an official end to Trump impeachment proceedings launched by the U.S. House of Representatives. For the third time in history, the Senate acquitted an impeached POTUS of all charges. The vote on each article came in along party lines, 52-48 and 53-47 “not guilty.”

Although the outcome was expected, the U.S. stock markets are seeing significant bids. At the halfway point of the American session, the DJIA DOW (+105), S&P 500 SPX (+11), and NASDAQ (+65) are very near all-time highs.

In addition to Trump’s acquittal, an announcement of Chinese tariff cuts is boosting sentiment. Next Friday, February 14, China is to slice tariffs in half on $75 billion worth of U.S. imports. This is a key development and part of the Phase 1 trade deal inked last month. At this point, China’s pledge is overshadowing the growing coronavirus death toll, which now stands at 520.

Trump Acquittal, Trade Hopes Drive “Risk-On” Sentiment

Currently, risk-on sentiment is dominating the financial markets. Accordingly, safe-havens are struggling, as evidenced by the daily uptrend in the USD/JPY.

USD/JPY, Daily Chart
USD/JPY, Daily Chart

Until Friday’s closing bell, there are a few levels to watch in the USD/JPY:

  • Resistance(1): Swing High, 110.28
  • Support(1): Bollinger MP, 109.35
  • Support(2): Daily SMA, 109.27

Bottom Line: If risk-on continues to dominate the U.S. markets, then a shorting opportunity in the USD/JPY may come to pass. Until elected, I will have sell orders in queue from 110.22. With an initial stop at 110.57, this trade produces 35 pips on a standard 1:1 risk vs reward ratio.

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