As already known, on Thursday the ECB lowered the base interest rate on deposits to -0.5% and resumed the QE program by 20 billion euros per month. The new quantitative easing program is expected to be “implemented as much as needed”, the ECB said.
European, world and US stock indices positively accepted the ECB decision, continuing to strengthen on Friday.
Expectations of reaching an agreement in a trade dispute between the US and China, easing the monetary policy of the Fed and positive macro statistics coming in from the USA on Thursday also contributed to the resumption of growth in major US stock indexes.
On Thursday, the Dow Jones Industrial Average rose 0.2% to 27182.00 points, which was the seventh consecutive growth session. The S&P 500 added 0.3% to reach 3009.00 points, while the NASDAQ Composite also rose 0.3% to 8194.0 points. The yield on 10-year US Treasury bonds rose on Friday to 1.805% versus 1.733% on Wednesday, which indicates the tendency of investors to buy more risky, but also more profitable stock market assets.
At the beginning of the European session on Friday, S&P 500 Futures were trading near 3014.0, close to absolute and annual highs at 3028.0.
On the eve of the Fed meeting next week, the S&P500 index maintains a long-term positive trend. It is widely expected that the Fed will lower rates by 0.25%, to 2.0%, the second time this year.
The index is trading above the key support level of 2865.0 (ЕМА200 and the lower border of the ascending channel on the daily chart, as well as the Fibonacci level 23.6% of the correction to the growth since December 2018 and the level of 2335.0). After the breakdown of the local resistance level of 3028.0 (absolute maximums), the S&P500 growth is likely to continue.
Above the support level of 2940.0 (ЕМА200 on the 4-hour chart and the middle of the rising channel on the daily chart), from S&P500 sales should be abstained.
Support Levels: 2990.0, 2972.0, 2965.0, 2940.0, 2900.0, 2865.0, 2765.0
Resistance Levels: 3028.0
Sell Stop 2990.0. Stop-Loss 3022.0. Goals 2972.0, 2965.0, 2940.0, 2900.0, 2865.0
Buy Stop 3022.0. Stop-Loss 2990.0. Goals 3028.0, 3100.0, 3200.0