Stock market today: S&P 500 climbs as ongoing AI-led rebound pushes tech higher
The outlook for a reversal lower in the US dollar broadly came to roost on a day when we had the venerable NFP announcement. Of course, that slowed down the process until the announcement. What really surprised me were the relative reactions across the pairs. While EUR/USD, USD/JPY and USD/CHF remained rather neutral, the depth of the pullback in GBP/USD was rather more robust. Certainly, it seems to have very limited upside at this point. Even so, if there is a slightly bullish move early in the day, we could see GBP/USD complete a triple three. Therefore, we’re going to have to observe any break levels.
At some point, we’ll come to a barrier that will then turn the dollar back to the upside.
As you will have noted, I didn’t include AUD/USD because it basically saw an additional rally but within reach of 4 points of its extreme. Therefore, we’ll have to be circumspect but ideally it should just push lower from the opening trade.
Equally, EUR/JPY did much the same – holding just 11 points below the Wave [ii]. Having said that, we’re going to need some care in the cross because there is a risk of an expanded flat down to 130.51 so there may be a risk of a break higher. Much depends on how the early stages develop.