The US market continued its crazy run at present as the US equity market rallied sharply on the back of unemployment claims and of course the Tax bill which has raised many eyebrows globally. US unemployment claims were positive at 238K (240K exp), but the main eyebrow raiser was of course the recent tax bill, as it cleared the first reading of the senate at present. Many had expected some resistance from republicans, but the reality was far from it as the bill went on to the next stage and US markets rallied accordingly. This is certainly a monumental moment for the Trump government, but also for the US corporate tax rate, which is likely to come in line with global averages. If markets are likely to focus around this, it will be a case of the potential for US equities rising further.
The S&P 500 has been the big winner so far with a jump over 2650, which had been expected on the back of positive news out about the tax win by the republicans. So far resistance can be found at 2650, but the push higher has created the potential for further resistance at 2660 as well. If the bulls do vanish however, I would expect the market to look to shift lower to 2626 and of course 2600 as the market continues to play around psychological levels. My own expectations is that there is still room to move to make it to the 2700 level at present with the recent Tax talks, and I would expect if it does pass that the S&P 500 could potentially rise up to this level.
The New Zealand economy continues to suffer after the recent change of government. This should come as no surprise given that dairy prices are falling and business confidence as a whole continues to suffer at present. NZ business confidence in the latest reading dropped to -39.3 (-10.1 exp) showcasing the anxiety in the NZ market. So far the NZ government has failed to deliver on any new economic plan that will expand the economy, hence the fall so far. Many are expecting to see further falls and I am inclined to believe it's likely to be the case.
The NZDUSD has been one of the biggest losers against the USD and continues to fall at present. So far resistance at 0.6834 and 0.6891 has looked unlikely to come under pressure as the NZDUSD slips down the charts. Support at 0.6802 and 06755 are likely to be the main targets for traders as the bears swipe lower on the charts.
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