Did the central bank bonanza this week give the all clear for stocks to rip higher? That appears to be the likely case even if we do see a bit of a pullback in US futures at the moment. Apple's earnings miss is weighing on tech sentiment but there will be those arguing that in the big picture, central banks will win over earnings in terms of being a key driver of market direction.
I won't argue much with that, especially when the technicals are also being supportive. That said, the S&P 500 is starting to run close to its 100-week moving average at 4,210. So, there is that to consider.
The dollar is also returning back into favour after the supposedly more dovish ECB now makes the Fed sound less dovish than initially thought earlier in the week.
With key technical levels also holding for dollar pairs, is this where things start to turn for the greenback? EUR/USD looks to have failed in its run above 1.1000 while GBP/USD never really looked like it was getting past its December highs of 1.2443-46. Meanwhile, AUD/USD has backed away from its August highs of 0.7125-36 and NZD/USD has once again failed to firmly break 0.6500 this week.
Then, we have USD/JPY - which is sticking to its downtrend and the fall in rates will keep that momentum going as bonds stay more bid following this week's dovish central bank mood.
Some food for thought perhaps, especially with contradictory flows to the norm playing out i.e. higher dollar, higher stocks.
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