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.
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.