The real turnover of the pandemic will be known soon – Market Analysis – July 28

The real turnover of the pandemic will be known soon – Market Analysis – July 28

Europe stands better in the face of the pandemic than USA

European stock indices erased gains made earlier in the session as American futures retraced amid a busy earning schedule this week.

What seems to be evident is that the ability to recover from the effects of the pandemic crisis in Europe is superior to that of the United States.

This is seen in the better results of European companies compared to American companies, in addition to controlling the disease's transmission more effectively.

The US economy

The Federal Reserve at its meeting tomorrow will reaffirm its determination to maintain its monetary stimulus program and low-interest rates for as long as necessary.

However, no change in its current monetary policy is expected.

Therefore, the catalyst for further increases in the stock markets will have to come from improvements in the macroeconomic figures.

In this sense, the economic US Q2 GDP figure published next Thursday should be relevant when setting the market's pace.

The market forecasts a -34.2% drop, a massive decline in economic activity that opens up the possibility that any improvement from this steep drop could be interpreted positively by investors.

Another aspect to consider is the fiscal stimulus package currently being negotiated between Republicans and Democrats in the United States House of Representatives. The objective is to place $3.1 trillion, a figure that would be a powerful boost for the markets if approved.

Currently, the Democratic party proposes the intermediate implementation of $1 trillion while an agreement is reached on the total figure.

The US stock exchanges

Meanwhile, the stock markets are waiting for more clarity on these events, but without losing their current upward trend, so from a technical point of view, one can speak of corrections to the pattern.

USA30 is in a bullish movement supported by a trend line, as shown in the chart, which currently passes around the 26000 zone, a level that cannot be lost to stay on the current trend. Above the 27060 zone is the first intermediate resistance to overcome to gain a bullish moment.


The same holds true for USA500, whose bullish moment is marked by the trend line that currently passes through the 3120 zone, below it, we would find a support level in 100-day SMA around 3050.

The level to overcome for it to accelerate gains would be at the last high in the 3280 zone.


FX majors

In the foreign exchange market, the Dollar has corrected its downward movement against other major currencies, except the Japanese Yen.

USD/JPY confirms the break of its support in the 106.00 zone and consolidates its downward movement with slight losses today that can be accelerated if the Federal Reserve confirms, as expected, its determination to maintain low-interest rates and even lower them if necessary.


The information presented herein is prepared by Miguel A. Rodriguez and does not intend to constitute Investment Advice. The information herein is provided as a general marketing communication for information purposes only and as such it has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. It does not regard to the specific investment objectives, financial situation or the particular needs of any recipient.

Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research.

Key Way Investments Ltd does not influence nor has any input in formulating the information contained herein. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

Therefore, Key Way Investments Ltd shall not accept any responsibility for any losses of traders due to the use and the content of the information presented herein. Past performance is not a reliable indicator of future results.