U.S. stocks have opened March with a bang, gapping higher during today’s session. At the midway point of the Wall Street trading day, the DJIA DOW (+620), S&P 500 SPX (+88), and NASDAQ (+335) are all deep into the green. For now, it looks like only a matter of time before another $1.9 trillion in COVID-19 stimulus is injected into the U.S. economy.

Last Friday, the U.S. House of Representatives passed Joe Biden’s “American Rescue Plan” by a slim tally of 219-212. Now, the enormous bill goes in front of the Senate where it is expected to be passed in some form by a narrow vote. Although there is a debate of when the bill will become law, it appears as though the Democratic Congress will garner approval.

In conventional economic news, this morning’s key numbers came from the ISM Manufacturing PMI (Feb.) and the ISM Manufacturing Price Index (Feb.). Both outperformed expectations:

Event                                                               Actual            Projected        Previous

ISM Manufacturing PMI (Feb.)                         60.8                    58.8                  58.7

ISM Manufacturing Price Index (Feb.)              86.0                  80.0                  82.1

All in all, this is a solid group of figures from the ISM. The rise in the price index is an important development and one that is sure to make the inflation-starved FED smile.

U.S. stocks have grabbed bullish momentum from stimulus hopes and today’s strong ISM figures. Surprisingly, the USD has followed suit vs many of the forex majors.

Stocks Up, EUR/USD Down To Open March

The EUR/USD is off to open March, extending last week’s losses. Compared to the volumes in U.S. stocks, the action has been somewhat muted.

Here are the key levels to watch in this market until Friday’s closing bell:

• Resistance(1): Weekly SMA, 1.2142
• Support(1): Bollinger MP, 1.1988

Bottom Line: If this morning’s positive correlation between stocks and the USD continues, a buying opportunity may come into play for the EUR/USD. For the remainder of this week, I’ll have buy orders in the queue from 1.1994. With an initial stop loss at 1.1969, this trade produces 25 pips on a standard 1:1 risk vs reward ratio.