By Margaret Yang, CMC Markets
US equities closed marginally lower as traders and investors preferred to stay on the sidelines amid ‘risk off’ sentiment, while the White House postponed the vote on repealing Obamacare.
Uncertainty remains over whether President Trump and his congressional allies can convince enough conservative Republicans to support the bill. The outcome could be interpreted as an indication of the Trump administration’s ability to deliver on its more aggressive plans regarding tax reform and infrastructure spending going forward, which are the main driver of the recent bull run.
Technically, the near-term indicators have turned bearish for the Dow Jones Index, with the 10-Day Simple Moving Average line trending downwards and MACD showing weakness in momentum. In the middle to long-term perspective, however, a bullish trend is intact, with 50- and 200-Day Simple Moving Average lines both trending upwards. The SuperTrend is still in an upward trend despite the recent sell-off, suggesting immediate support levels at 20,645 and 20,400 respectively.
Hong Kong 50 – Cash
The US dollar rebounded mildly last night to the 99.70 area, gaining some ground against most of the G10 peers. GBP/USD slid for the first time in eight days, showing weakness in the upward momentum as the RSI reached an overbought level. Over the past six months, GBP/USD has been trading in a range between 1.209-1.273, which served as strong support and resistance levels in the medium term.
Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.