European equities, US futures and gold rallied on Monday, with the dollar briefly falling under bearish pressure as Trump put the finishing touch on the fiscal stimulus saga on weekend. Last week, he complained that Congress had made stimulus payments "absurdly low" and proposed raising them to $ 2,000, but this narrative failed to evolve into serious risk for markets.
The stimulus bill includes increased unemployment benefits, cash payments, funding for government agencies, a moratorium on evictions, support for small businesses, etc. In short, this is the "safety cushion" for the American economy, which should allow markets to rally further.
Here is how market reacted to Trump's tweet about the relief bill:
As we can see, Trump was able to make some market participants believe that his reluctance to sign the bill immediately poses some meaningful risk for the deal. That’s why the news that Trump signed the bill came as a surprise on the market and led to the intraday rally in equities.
The demand for risk has been also supported by the start of vaccination in Europe. The DAX jumped 1.5%.
The dollar index is trying to form support at 90 points (horizontal level), while clinging more and more to the upper border of the descending channel:
From the technical point of view, it makes sense to consider long positions on USD after a breakout and corresponding consolidation above the upper border of the channel. The market, as we can see, is trying to stay in the channel, so the priority targets probably reside lower - the previous low at 89.75, i.e. horizontal level and next multi-year low at 89.50.
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