Biden administration infrastructure plan boost market sentiment
Market sentiment saw a strong increase this week after the Biden administration announced a massive $2.3 trillion infrastructure and green energy spending plan. Stock markets rallied and bond yields ticked lower as President Biden outlined his ambitious new spending plan. In order to pay for the $2.3 trillion package, the Biden administration plans to roll back the Trump administration corporate tax cuts. The S&P 500 index rallied above the 4,000 resistance level for the first time ever in the aftermath of the announcement, as traders factored in the increased chances of high growth and low-interest rate environment.
- The S&P 500 is only bearish while trading below the 3,975 level, key support is found at the 3,950 and 3,900 levels.
- The S&P 500 only bullish while trading above the 3,975 level, buyers may test towards the 4,200 and 4,500 resistance levels.
Bitcoin posted a sixth straight month of gains this week, as the pioneer cryptocurrency performed its longest winning streak since 2013. Bitcoin had a series of bullish news catalyst this week, as VISA, PayPal both announced new cryptocurrency initiatives. Other bullish news for Bitcoin this week included the CME exchange including mini futures contracts to allow greater access to the futures market for smaller traders, and a substantial amount of bullish options bets for Bitcoin to trade at $80,000 by May this year. The BTCUSD pair rallied towards the $60,000 resistance level after staging a $5,000 advance from the worst levels of the week.
- The BTCUSD pair is only bearish while trading below the $57,000 level, key support is found at the $56,000 and $55,000 levels.
- If the BTCUSD pair trades above the $57,000 level, buyers may test towards the $60,000 and $65,000 resistance levels.
The price of oil moved above the $60.00 level this week after OPEC members agreed to gradually start increasing oil output over the next few months. OPEC ministers had agreed to hold output back by around 8 million barrels per day over recent months, due to fears about oversupply and lack of consumption globally. The news that OPEC would attempt to increase oil output by around 350,000 barrels per day over the coming months was seen as a bullish bet on the global economy. The thinking is that as the vaccine rollout starts to work then demand for oil would increase as developed economies and travels go back to normality.
- WTI oil is only bullish while trading above the $60.00 level, key resistance is found at the $63.00 and $64.50 levels.
- WTI is only bearish while trading below the $60.00 level, key support is located at the $57.00 and $55.00 levels.
The United States economy posted a series of bullish data points this week, which pointed to an overall strengthening of the world’s largest economy. The ISM manufacturing survey came in at a thirty-seven year high this week, with a blockbuster 64.7 headline reading. The report highlighted that the US manufacturing sector is currently experiencing a major boom not seen since 1983. The March Non-farm payrolls job report also showed that over 900,000 new US jobs had been created, while the official US unemployment rate came in at just 6 percent. The market moved into the risk-on mode, following the string of impressive data point releases.
- The GBPUSD pair is only bearish while trading below the 1.3780 level, key support is found at the 1.3670 and 1.3500 levels.
- The GBPUSD pair is only bullish while trading above the 1.3780 level, buyers may test towards the 1.3890 and 1.3930 resistance levels.