DOW opened notably higher today and breached 24000 handle to 24044.39. But it quickly lost momentum. For the moment, it’s feeling heavy from 24000. Current fall from 25449.15 is seen as resuming the decline from 26616.71 to 23360.29. Ideally, if our view is current, any interim recovery should be brief and there should be near them downside acceleration through 23360.29 support. And, break of 24453.14 resistance is needed to indicate bottoming. Otherwise, DOW will more likely have a take on 23360.29 than not.
In the currency markets, after some strong momentum in early US session, Euro is now trading as the strongest one for today, overtaking NZD.
In particular, EUR/USD’s breach of 1.2445 resistance is now setting up the pair for a test on 1.2555 high.
EUR/AUD has met upside target of 61.8% projection of 1.5130 to 1.5976 from 1.5621 at 1.6130 first. With current solid momentum, it should be on track to 100% projection at 1.6444.
Fed Kaplan: Probably take more fiscal action to grind down unemployment
Dallas Fed President Robert Kaplan told CNBC that the US would probably need more fiscal action “whether it’s aid to governments or other fiscal action as we go through this.”
“The problem is we’re going to have an unemployment rate that peaks at around 20%, which we’re going to reach very soon,” he added. “We’re going to end the year with an unemployment rate as high as 10%, and we’re going to need to grind that down, and it’s probably going to take more fiscal action to help grind that down.”
“The Fed has done a lot to help stabilize the markets and make sure that small companies, mid-size companies, bigger companies have access to capital,” Kaplan said. “But again, these are loans. We’re the lender of last resort and this is intended to be a bridge to when we are going to recover.”