US equities continued their four-day rally, fully recovering the AI-driven sell-off and setting up for new bullish impulses after closing above their 20-day and 50-day MAs. The US Dollar Index fell below 100, extending losses as GBP surged on a strong UK fiscal outlook and Asian markets traded firmer on rate-cut expectations.
US stocks rallied for the fourth consecutive session, US dollar extends losses
Key takeaways
- US equities extended their four-day winning streak, fully reversing last week’s AI-driven sell-off, with all major indices reclaiming their 20-day and 50-day moving averages and setting up for potential new bullish impulses.
- The US Dollar Index weakened further, closing below both its 20-day and 200-day moving averages as sterling surged on a stronger UK fiscal outlook, while Asian session trading saw continued USD softness amid firmer Fed rate-cut expectations.
- Asia Pacific markets traded broadly higher, led by Japan’s Nikkei reclaiming 50,000, steady gains in Hong Kong and Singapore, and the ASX 200 holding above its 200-day moving average despite muted price action.
On Wednesday, 26 November, the US stock market extended its winning streak for the fourth consecutive session ahead of the Thanksgiving holiday that kicks off today. The S&P 500, Nasdaq 100, Dow Jones Industrial Average, and Russell 2000 small-cap index all rallied by 0.7% to 0.9%.
Most importantly, from a technical analysis standpoint, the up moves seen in the past four days have erased all the losses inflicted on last Thursday, 20 November, induced by the Artificial Intelligence (AI) juggernaut, Nvidia’s ex-post earnings negative share price reaction, and all four US benchmark stock indices managed to close above their respective 20-day and 50-day moving averages, staging up the stage for potential new bullish impulsive up move sequences.
In the FX market, the US dollar extended its losses for the second day on Wednesday, 26 November, as the US Dollar Index declined by 0.2% and closed below its 20-day and 200-day moving averages at 99.56, trading below the 100-psychology level for the first time since 18 November.
The current weakness seen in the US dollar has been reinforced by the bullish reversal seen in the sterling, as the GBP/USD rallied by 0.6% to hit almost a four-week high of 1.3243 on Wednesday, as market participants responded positively to the announcement of the UK government’s autumn budget, as UK Chancellor Reeves surprised markets with a higher-than-expected 22 billion pound fiscal buffer, an indication of the chancellor’s commitment to fiscal restraint.
In today’s Asian session, the US dollar continues its descent, led by intraday outperformance of the NZD (+0.5%), JPY (+0.3%), and AUD (+0.3%) against the greenback at the time of writing on the backdrop of firmer Fed rate cut bets of an 85% chance for the upcoming 10 December FOMC meeting based on data from the CME FedWatch tool.
Asia Pacific equities were mostly firmer. Japan’s Nikkei 225 gained 1.1%, reclaiming the 50,000 psychological level with an intraday print of 50,095. Hong Kong’s Hang Seng Index and Singapore’s Straits Times Index each added 0.4%. Australia’s ASX 200 was little changed at 8,612 but continued to hold above its 200-day moving average for a fourth straight session after last Friday’s brief breach, reinforcing support near 8,510.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
