After beginning the US session brightly and trading up to its highest level of the day the US100 has fallen lower in the past hour. Price is now not far off being flat on the day and given the large sell-off seen on Friday there is a heightened level of caution in the market whenever selling is seen.
Late in the Friday session there was some strong selling seen for no apparent reason. The last hour has seen a bearish engulfing candlestick. This had offered the bears another chance for a retest of the lows at 5643 could be seen as significant as a break below could see the market unwind gather pace. A break above the daily highs at 5758 would negate this recent weakness.
There was little by the way of news to support Friday’s drop and there is no apparent reason for the recent weakness. Treasury Secretary Mnuchin has been on the wires this afternoon saying that Trump’s growth goal may involve difficult budget choices.
Later on US Attorney-General Jeff Sessions is set to testify at 7:30 PM (BST) with Trump’s team and their alleged ties to Russia back in focus. The Senate Intelligence Committee is investigating ties between the Trump administration and Russia and Sessions has been under fire for undisclosed contacts with the former Soviet country. During the election campaign he twice met Russian Ambassador Sergey Kisylak, despite telling the Senate during his January confirmation hearing that he “did not have communications with the Russians.”
Last week’s testimony from Comey was eagerly anticipated but ultimately proved to be a bit of a damp squib. Perhaps one of the President’s own team may reveal something more market moving.
The US dollar is a little lower on balance going into the European close with the Canadian dollar the biggest beneficiary.