Breaking News
0
Ad-Free Version. Subscribe now to follow markets, faster and distraction-free. More details

Opening Bell: U.S. Futures Edge Higher; Oil Gains; Dollar Weaker

ca.investing.com/analysis/opening-bell-us-futures-edge-higher-oil-gains-dollar-weaker-200440520
Opening Bell: U.S. Futures Edge Higher; Oil Gains; Dollar Weaker
By Pinchas Cohen/Investing.com   |  Sep 16, 2020 06:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • US futures point to extended rally, after bottoming on intra-day chart
  • Oil prices after inventories show unexpected drawdown
  • Dollar remains weak

Key Events

US contracts pointed to a higher open on Wednesday and European stocks edged higher ahead of the FOMC policy meeting today.

The Fed is not expected to change interest rates at its first meeting since it outlined its new framework for economic policy. But, the market is looking for additional details on how long the average inflation figure will be permitted to remain above 2% before it will feel obligated to raise rates.

Global Financial Affairs

Investors cautiously tweaked positions to place global markets in a holding pattern as they wait for the Fed's policy announcement.

Markets are hoping for some improvement in the central bank’s economic forecasts, as well as reaffirmation of market support while we await additional coronavirus relief packages from US lawmakers, in order to justify buying the biggest dip in months.

All four major US contracts, Dow, S&P, NASDAQ and Russell 2000, were up this morning, with those on the NASDAQ 100 returning to outperformance (+1.4%) having led the selloff.

NASDAQ Futures 240
NASDAQ Futures 240

The contract on the NASDAQ 100 is attempting to double-bottom the 4-hour chart.

The Stoxx Europe 600 Index advanced 0.5%, extending its rally for the fourth straight day on the back of strong results from the retail sector—Zara-owner Inditex (MC:ITX) announced a return to quarterly profit this morning and yesterday H&M (OTC:HNNMY)'s results exceeded expectations. 

Stoxx Daily
Stoxx Daily

The pan-European index inched toward the top of an ascending channel, a pattern that demonstrates that buyers are gaining incremental footholds into seller’s territory.

Asia was mixed with tech stocks leading Australia’s ASX 200 (+1%) to a weekly high—outperforming the region. China’s Shanghai Composite (-0.4%) snapped a three-day rally, weighed down by consumer and healthcare shares after experts voiced concerns over the safety of drugs used in experimental coronavirus vaccines in the country.

American equities managed a higher close Tuesday, as tech shares offset a late selloff in financials, including JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Bank of America (NYSE:BAC). The S&P 500 Index climbed for the third straight day, with communication services, real estate, and consumer discretionary shares outperforming.

Yields, including for the 10-year benchmark Treasury, have been ranging for the third day, but the dollar returned to a slide.

US Dollar Index Daily
US Dollar Index Daily

While the dollar may have been dropping within a falling channel, its trading pattern since late-July allows for a bottom in the shape of a H&S.

Dollar weakness boosted gold for the third day, after it may have completed a bullish pennant (blue).

Gold Daily
Gold Daily

Alternatively, the precious metal may be forming a third consecutive bearish flag—resisted by the rising channel’s bottom. Only a strong move over $2,000 will clear this self-contradictory pattern. Momentum and price-based indicators seem to be in favor of the bullish pennant scenario.

Bitcoin climbed for the third day in a row, blowing out what would have been a bearish pennant—turning it bullish—following a H&S top. It would be interesting to see which pattern’s dynamics will win, the bearish H&S or the now-bullish pennant.

Bitcoin Daily
Bitcoin Daily

The cryptocurrency's H&S is larger and therefore has more vested interest, but on the other hand its minimum implied target has already been achieved on the first day of the solid downside breakout. Note, the 100 DMA supports the pennant, while the 50 DMA adds resistance to the H&S.

West Texas crude oil extended gains after a surprise American stockpiles drop.

Oil Daily
Oil Daily

Up Ahead

  • Wednesday sees the FOMC policy decision and news conference from Chair Jerome Powell.
  • Bank of Japan, Bank Indonesia and Bank of England policy decisions due Thursday.
  • Friday sees quadruple witching—the quarterly expiration of futures and options on indexes and stocks—in US markets

Market Moves

Stocks

  • Futures on the S&P 500 Index increased 0.3%.
  • The Stoxx Europe 600 Index gained 0.3%.
  • Germany’s DAX Index advanced 0.2%.
  • The MSCI Asia Pacific Index advanced 0.4%.

Currencies

  • The Dollar Index declined 0.2% to 92.94.
  • The euro was little changed at $1.1852.
  • The Japanese yen strengthened 0.1% to 105.35 per dollar.
  • The British pound was little changed at $1.2886.

Bonds

  • The yield on 10-year Treasuries dipped less than one basis point to 0.67%.
  • Germany’s 10-year yield dipped one basis point to -0.49%.
  • Britain’s 10-year yield declined one basis point to 0.206%.

Commodities

  • West Texas Intermediate crude increased 2.1% to $39.10 a barrel.
  • Gold strengthened 0.5% to $1,963.98 an ounce.
Opening Bell: U.S. Futures Edge Higher; Oil Gains; Dollar Weaker
 

Related Articles

Opening Bell: U.S. Futures Edge Higher; Oil Gains; Dollar Weaker

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email