The US market continues to chug along at a pace and more so today after the Tax Bill was all but assured by congress and the president himself; he still has to sign the bill but it looks like a done deal and we can expect some solid growth in the corporate sector as a result. Adding further economic fire to it all was of course US existing home sales m/m coming in very strong at 5.81M (5.53M exp) showcasing a lift of 5.6% on the previous month. Obviously, this will bode well for markets as well as reinforcing the view that the housing market is strong, which is of course one of the bed rock foundations for any economy. The question will now be focused on the infrastructure bill that is likely to be pushed in the new year after Trump has won this victory. The possibility of this coming into fruition could lead to overheating in the market and the FED may be forced to push rates even higher, if bond markets are anything to go by the lift in yield is a clear signal that markets are expecting things to rise.

On the S&P 500 thus far we've seen large rises but the market is a little coy going into the Christmas period and I anticipate we won't see much real movement in it until after the new year as the markets start to pick up again. However, there are a number of key levels I feel that are still applicable and holiday traders will be looking to catch the bounce on a few of these, namely support levels at 2675 and 2650 - both of which are key levels now after the break out. Could we crack 2700? It's looking a little unlikely as the market slows but it's possible. I would be surprised to see the market do any further aggressive plays this late into the year. That being said Trump does have some sway on the markets with the Trump effect, so who knows. What we do know though is that markets are likely to respect key levels during periods like this.

The GBP might see some volatility though shortly before the year is out with Damien Green resigning from the cabinet. Now the key thing around this is that Davis the Brexit Minister had said previously he will leave if his friend Green is pushed. This would have an enormous impact on the market if he did as he would mean a loss of confidence that negotiations could continue in their present form.

For now the GBPUSD has been sliding lower towards the long term bullish trend line in a small bearish channel. Support can be found accordingly at 1.3313 and 1.3244, while resistance levels can be found at 1.3438 and 1.3523 at this stage. The long term bullish trend line will be the key level, but we would only push that if the market though Davis might leave at this stage. Otherwise it could be a case of consolidation heading into the new year.

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