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US equities were pulled lower yesterday after Biden’s proposed plan to raise capital gains tax sparked jitters, though it is befitting the sluggish mood in stocks this week.
There were little positive cues for equities in general as investors seek a breather and the story yesterday provided a reason (a very good one in fact) to take money off the table.
But it is still unclear how all of this plays out, with the question on whether the capital gains tax will apply for 2021 or 2022 still left hanging.
The S&P 500 and Dow defended their 100-hour moving averages respectively towards the close yesterday so let’s see if buyers have the appetite to keep that going today.
In FX, EUR/USD continues to be sidelined in between 1.2000 and its 100-day moving average at 1.2052. USD/JPY is tracking just below 108.00 as sellers are keeping the downside push going, though Treasury yields are steady and a little higher at 1.56%.
GBP/USD came under pressure in a drop just below its 200-hour moving average yesterday but is seen holding above that now @ 1.3850 levels – also holding at its 50.0 retracement level from the swing higher in April @ 1.3839.
USD/CAD is testing waters around its daily support at 1.2476-00 currently as sellers are looking to push the post-BOC momentum, targeting a firm break below 1.2500.
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