FX.co ★ 24.09.2021: US stock market digests Fed announcements (S&P500, DXY, USD/CAD, BTC/USD).

Apparently, the market has overcome the confusion caused by the Fed’s policy decisions. Frustration on Wall Street was short-lived. On the next day following the Fed’s meeting, the key stock indices went upwards in confidence. Thus, the stock market reached a strong bottom and got stuck in a range. The S&P 500, which is an accurate barometer of the stock market health, climbed 1.2% to trade at 4,449. The expected range is between 4,410 and 4,490. The dismal update on US unemployment claims released yesterday was somehow beneficial to the equity market. The data fell short of expectations. The number of initial jobless claims increased to 350,000 last week. The number of Americans living on regular unemployment insurance also grew to 2.84 million from 2.7 million earlier. Previously, weekly updates had been logging a downtrend for a few months. Perhaps, employment growth has almost exhausted momentum. This is bad news for the labor market. Nevertheless, a slowdown in hiring is a convincing argument for the US Fed not to rush to tighten monetary policy. This is good news for the equity market. The US dollar is trading steadily at its lowest level in a week against major currencies. It perked up following the Fed’s announcements but went back to the original trading range yesterday. Its index is now trading sideways at near 93.10 amid uncertain market sentiment. Experts foresee a trading range for the index between 92.80 and 93.40. Despite indecision in the currency market, the USD/CAD pair went down to 1.2670 amid the soft greenback. The Canadian dollar is highly sensitive to trends in the oil market. Oil prices gained 2 dollars in the last two days on the back of buoyant demand and soaring gas prices in Europe. The bullish trend in the oil market is pushing the USD/CAD pair down. Meanwhile, the currency pair is likely to trade in the corridor of 1.2550 to 1.2720. In case oil prices extend a rally, the pair could decline lower. On the crypto market, it is important for Bitcoin not to sink below 44,100 dollars. Otherwise, the price might tumble a few thousand dollars. Currently, the cryptocurrency is running a grave risk of another nosedive in light of the news from China. The People’s Bank of China is resolute to clamp down on crypto exchanges. Meanwhile, all cryptocurrency transactions are recognized as illegal. If Bitcoin consolidates above 44,100 dollars, it will be able to rebound to 45,000. Alternatively, the price could break support and escalate a decline. All in all, the US stock market has got trapped in a trading range. Its further dynamic will depend on market response to news. Analysts warn traders to be braced for a seesaw on Wall Street. At the same time, the market is expected to remain mainly flat until new market catalysts trigger either a bullish wave or another sharp drop.

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