MARKETS RISE AFTER US SEALS DEAL WITH MEXICO

Global stocks rose today after the Trump administration announced a new deal between the United States and Mexico. The two countries have been negotiating for a deal to fix the North American Free Trade Agreement (NAFTA). At the White House, the president announced that the two countries will now move to finalize the deal, which he said will be beneficial for the two countries. Canada was exempted from the deal but Trump and his Mexican counterpart said they were ready to accommodate the country. Trump fell out with the liberal Canadian president Justin Trudeau after the G10 meeting in Canada.

The pound rose against the US dollar as Theresa May started an official trip to Africa. The five-day trip will see her visit South Africa, Kenya, and Nigeria. She is expected to build new partnerships with the continent as the UK prepares for Brexit. This is the first visit by Theresa May to Africa. As she travelled to Africa, her trade minister, Liam Fox asked his Asian counterparts to convey their views on Brexit to the European Union. The EU and UK have recently disagreed on the terms for Brexit. May’s government has proposed a plan for a soft Brexit, which the EU has opposed.

US stocks will open the markets higher as traders continue to be excited about the prospects of a trade deal. Yesterday, the Nasdaq reached the $8,000 level for the first time. YTD, the tech-heavy index has gained by 19%. Some of the biggest gains in the index are Amazon, Netflix, Atlassian, and Google. The S&P and Dow also point to a higher open of 0.15% and 0.20% respectively.

EUR/USD

The EUR/USD pair started surging almost two weeks ago. Since then, the pair has moved from 1.1300 and is currently trading at 1.1710. This is the highest level since August 1. The question now is whether the pair will continue moving up or retrace its previous moves. The ADX – which is an indicator of the strength of a trend – has fallen from 56 and is currently at 41. The double exponential moving average of 25 and 50 EMA shows that the pair could continue the upward momentum. However, there are still chances that the pair will move lower as bulls take profits for the month.

USD/CAD

The US dollar continued to fall against the Canadian dollar after the deal with Mexico yesterday. It is now trading at 1.2920, which is the lowest level since June this year. This price is below the 50 and 25-hour moving average as shown below. It is also below the important support of 1.2960 while the MACD is at the lowest level in more than a week. The pair is likely to be slightly volatile as traders wait to see whether Mexico will join the new deal.

NAS100

The Nasdaq index crossed the important record of $8,000. This was an almost $3000 gain from the day Donald Trump was elected president. The level is above all the moving averages. On the hourly chart below, the index has an RSI of 72, which is lower than the yesterday’s high of 86. After crossing the $8,000 level, the pair is likely to move slightly lower as some bulls exit their trades. This will likely create good entry positions for bullish traders.