Dow Jones Industrial Average advanced 1.4% to a new record of 24,272 points as market cheered on US tax reform hopes.
Arizona senator John McCain, the Republican Senate majority leader, showed his support to the Republican tax plan on Thursday evening, which added the likelihood that the tax bill could pass through the senate by end of this year. S&P 500 climbed 0.82% to 2,647 points and Nasdaq rebounded 0.73%, erasing part of Wednesday’s loss.
The US dollar Index, however, was trading lower last night partially due to strong euro and pound. GBP/USD surged over 1% overnight to 1.353 area – a level not seen since end September this year. Rally on sterling was largely driven by progress on Brexit divorce bill, which not only removes the downside of a ‘hard Brexit’ but also raises trade talk hopes.
Technically, GBP/USD is trading within a well-defined uptrend channel. Its 10-Day Simple Moving Average line and SuperTrend (10,2) are both sloped upwards, suggesting the uptrend is intact.
As expected, OPEC and major oil producers have reached common ground on Thursday to extend the current production freeze plan until the end of 2018 in an attempt to support weak oil prices. Brent and WTI crude prices were little moved after this announcement, as market have already priced-in this expectation.
OPEC and Russia together produce over 40 percent of global oil supply. But a key reason behind the global glut is increasing output from North America, especially the shale oil production. With oil price rising above $60 and OPEC extending its cut, the net effect will probably attract more drillings activities in the United States and thus cap the upside of oil prices. Technically, US$64.3 remains to be an key resistance level for Brent in the near term.
- 10-Day Simple Moving Average and SuperTrend (10,2) are both trending upwards, suggesting uptrend remains strong
- Price is trading within an ascending channel
- Immediate resistance level at 1.3652 area, which is the previous high
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