U.S. Markets Rally In Post-Holiday Session

Posted Tuesday, May 26, 2020 by
Shain Vernier • 2 min read

The bulls are back on Wall Street during this post-Memorial Day session. Just over the midpoint of the trading day, the DJIA DOW (+660), S&P 500 SPX (+55), and NASDAQ (+95) are all deep into the green. Several key numbers are being challenged, including 25,000 in the DOW and 3000 in the S&P 500. At the moment, sentiment is positive, with bids hitting risk assets in mass.

On the economic news front, there were a few peripheral U.S. metrics released today. Here’s a look at the data:

Event                                                                              Actual                  Projected            Previous

Housing Price Index (MoM, March)                             0.1%                        0.3%                      0.8%

New Home Sales (MoM, April)                                     0.623M                   0.490M                0.619M

New Home Sales Change (MoM, April)                        0.6%                        -21.9%                  -13.7%

Dallas FED Manufacturing Business Index (May)       -49.2                         NA                        -74.0

After quickly scanning today’s reports, there’s reason for optimism. Make no mistake, the numbers are still bad; however, New Home Sales (April) and the Dallas FED Business Index (May) have rebounded. Although economic activity remains depressed, it looks like the roots of recovery are growing deeper by the day.

Today’s session has been a tough one for the safe-havens. Let’s take a look at the USD/CHF and see where things stand as May rolls toward its close.

Strong Session For Risk Assets

The bullish action in equities has left safe-havens reeling. However, the Swiss franc is a bright spot and putting pressure on the USD.

USD/CHF, Weekly Chart
USD/CHF, Weekly Chart

Here are the Swissy’s key levels:

  • Support(1): Weekly SMA, 0.9651
  • Support(2): 38% Retracement, 0.9626
  • Resistance(1): Bollinger MP, 0.9689

Bottom Line: At this point, the USD/CHF is in heavy intermediate-term rotation. Of course nothing lasts forever. If this pair posts a bearish move, then a buying opportunity may come to pass.

Until elected, I will have buy orders in the queue from 0.9631. With an initial stop loss at 0.9574, this trade produces 50 pips on a slightly sub-1:1 risk vs reward ratio.

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