FX.co ★ 27.09.2021: US stocks reverse upwards (S&P500, DXY, USD/CAD, BTC/USD)

The US stock market closed last trading week with minor gains of the three key indices. The thing is that such an uptick does not mirror the whole picture. The stock indices tumbled 1% opening the New York trade on Friday. However, later in the session the market won back losses in full under strong buying pressure. So, the market made a bullish trend reversal. Currently, a lot of assets have recovered to the levels of September 16-17. What will happen next?

The stock market is extending moderate growth in the early New York trade on Monday. The S&P 500 closed almost flat on Friday. Today the index has already rebounded nearly 0.5% to trade at 4,455. In case of further growth, it will be able to shift towards the upper border of the trading range between 4,410 and 4,490.

This week, the House of Representatives of Congress is expected to vote on the infrastructure budget worth 1 trillion dollars. The outcome will serve as a market catalyst for US stocks.

Interestingly, the US dollar index is still trapped in the range of 92.90 to 93.50 despite the fact that a few days have passed since the Fed’s policy meeting. Technically, it looks like the index has paused for breath before a new bullish wave. Apparently, the US dollar is saving its strength to break the level of 93.60 and advance further towards 94.00 – 95.00. However, the index will be able to conquer such elevated levels after the next policy meeting of the US central bank.

Meanwhile, oil and gas are still trading at incredible highs. As a result, the steady bullish trend in the oil market is pushing the USD/CAD pair down. Experts say the loonie is set to hold the upper hand against its American rival because of growing global energy demand and contraction of US crude inventories. So, the USD/CAD pair could move even lower. Today the currency pair is trading at near 1.2620. The expected corridor is between 1.2580 and 1.2650.

Bitcoin opened a new trading week at the level above 43,000 dollars. Over the weekend, the bears tried to beat the price down, but the bulls entered the market at the level of 41,000 and triggered strong buying pressure. Despite determined efforts of Beijing to ban cryptocurrencies in China, the crypto market did not suffer a severe downturn. Bitcoin price survived above the level of 40,000 dollars.

Hence, it becomes evident that China alone is not able to spark off the overwhelming bearish force. The same move from the US would deal a devastating blow to the crypto market. Meanwhile, analysts expect Bitcoin to recover at least to 44,500 dollars per token.

All in all, this trading week opened on a quiet note. The US stock market is trading sideways. Perhaps, it will trade with a more vigorous dynamic later today.

The US durable goods orders released today happened to be slightly lower than expected. However, the news hardly matters anything to the market. Traders are anticipating data of major importance on Friday: personal consumption expenditures.

Obviously, the US equity market is nowadays vulnerable to inflation, especially in the face of the Fed’s eventual decision on tapering economic stimulus. Another important report this week is the ISM manufacturing PMI for September which is also due on Friday. The index is expected to be upgraded to 59.9 for August and rise to 60.5 in September. Follow developments in financial markets on InstaForex TV channel!