Yesterday, all key US stock indices closed in the red. This could mean that the stock market has eventually entered a correction stage, following a protracted rally. Besides, experts say that at the stage of record highs, market leaders are logging muted growth but worst-performers are coming at the forefront. This situation emerges because most investors sniff out a looming deep retracement shifting focus towards time-tested stocks. Is it the case today? Let’s find out!
The Dow Jones slipped 0.4% yesterday. Unlike a steep decline of the Nasdaq and the S&P500, the Dow Jones dipped at the least degree by 0.4%. Importantly, such dynamics could mean that the US stock market is facing a large downward correction in the nearest days. Today the Dow Jones is trading at about 34,080. It is expected to hold in the corridor of 33,700 to 34,150.
Meanwhile, the US dollar index is extending a losing streak on Tuesday. It fell to near 90.90, the lowest level since March 3. A week ago, this decline looked like a retracement. Now analysts do not rule out a trend reversal. Today, the index is likely to trade in the corridor of 90.60 to 91.30.
The USD/CAD pair is trading today at about 1.2490. The loonie coped with a minor advance despite the broad-based weakness of the US dollar. All in all, the Canadian dollar has appreciated roughly by 100 pips since late March. Now the loonie is anticipating at least a correctional climb of the greenback. In case the US currency takes a nosedive, support could be breached. Then, the Canadian dollar will be able to strengthen to 1.2360 against its American rival.
Bitcoin sank another 4% over the latest 24 hours. Today the most popular digital token is trading at about 55,200 dollars. Most crypto traders have opened sell positions on Bitcoin at the level of 55,000 – 56,000 dollars. If the level of 54,000 dollars is broken, the number one cryptocurrency is expected to continue its fall, heading for 53,000 – 52,000 dollars.
To resume growth, Bitcoin has to keep afloat above the level of 54,000 dollars. In this case, Bitcoin will be able to overcome the level of 56,000 dollars and approach the mark of 57,500 dollars. This scenario could terminate the ongoing bearish trend.
Investors are anticipating a monetary policy update from the ECB on Thursday. On the same day, the US Labor Department is due to release weekly data on unemployment claims. Besides, top US companies post upbeat corporate reports that encourage a further growth of US stocks. The question is open for how long?