- Summary:
- The S&P500 Index (SPX500) is recovering some of Monday's huge losses as PBOC limits weakness of Chinese Yuan. Investors eyeing higher open for Wall Street.
The S&P500 Index futures are up 3% as investors look towards the opening bell of today’s trading on Wall Street. Wall Street had its worst day in 2019 as the Dow Jones fell nearly 1000 points on the day, while the S&P500 fell by 250 points. This was as a result of an apparent escalation of the US-China trade war, taken further by new US tariffs on Chinese imports and the alleged move of the People Bank of China’s (PBOC) in allowing the Yuan to fall to a decade-long low.
The PBOC has since issued a denial to the President Trump’s accusations of being a currency manipulator, saying in a statement issued by PBOC Deputy Governor Chen Yulu that China had never tried to use forex rates manipulation as a competitive weapon. Possibly to back up this denial, the PBOC today took action to bolster the Yuan, thus easing market concerns.
Technical Play for SPX500
Having bounced off yesterday’s low of 2777 at the 38.2% Fibonacci retracement traced from the swing low of December 26, 2018 at 2315 and the July 29 swing high of 3026, the S&P 500 Index futures are now trading at 2861.50. This is the central pivot price level and also the price level of the 23.6% Fibonacci retracement.
The major support for SPX500 continues to remain 2729 (March and June 2019 lows). A rejection of the price candle at the central pivot opens the door for a retest of 2789 and possibly 2729. A break of 2729 will bring the 50% retracement price of 2676 into focus.
A break of 2861.50 will open the door for attainment of 2901 and possible 2958 (May and June 2019 highs).Don’t miss a beat! Follow us on Twitter.