Congress Reaches COVID-19 Aid Agreement, Markets Rally - Forex News by FX Leaders
congress

Congress Reaches COVID-19 Aid Agreement, Markets Rally

Posted Wednesday, March 25, 2020 by
Shain Vernier • 2 min read

Partisan politics is the story of the day as Congress struggles to sign off on a COVID-19 stimulus bill. This marks the third straight trading session dominated by media buzz over the passage of a government stimulus. Wall Street believes that an aid package will become a reality very soon, with the DJIA DOW (+1088), S&P 500 SPX (+91), and NASDAQ (+153) trending higher.

At this hour (1:15 PM EST), a deal has been announced between the White House and Senate. Speaker of the House of Representatives Nancy Pelosi has offered a “tepid endorsement,” to the deal. Ultimately, this development suggests that a final bill is very likely to be ratified later today. If not, it’s back to the drawing board ― a politically risky move with many members of Congress up for re-election in November.

Congress Plays Politics As The DJIA Trends Higher

The Dow Jones Industrial Average (DJIA) is trending north for the second consecutive day. For June E-mini DOW futures, prices are challenging a key 38% Fibonacci retracement level. If taken out, we may begin to consider the possibility of the COVID-19 panic bottom being in for U.S. equities.

congress
June E-mini DOW Futures (YM), Daily Chart

Right now, there are a few levels on my radar for this market:

  • Resistance(1): 38% Retracement, 21,477
  • Resistance(2): Bollinger MP, 23,096
  • Support(1): Spike Low, 18,086

Overview: For the time being, it’s all about the 38% Fibonacci resistance level in the June E-mini DOW. This area is under assault; if it holds after the stimulus bill is passed by Congress, then look out below.

On a side note, it is important to remember that today’s strong showing for the DOW is tied largely to the performance of Boeing stock (BA). Boeing is up more than 30% on the session; the robust gains have been a primary catalyst for the rally in the DOW. Should the U.S. government’s stimulus package fail to deliver what’s expected, a rapid reversal will become extremely likely.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
Related Articles
Comments

Leave a Reply

avatar
  Subscribe  
Notify of