ASX 200 Index takes its cues from Wall Street post dovish Fed

• The Fed is “totally focused” on providing the economy with the support it needs, stocks cheer.
• ASX 200 Index follows the lead of US stocks and rises to the occasion. 

The ASX 200 Index is trading up 0.63%The Australian sharemarket was poised for a strong opening on the back of the Federal Reserve and it has not disappointed.

At the time of writing, the ASX 200 Index is trading up 0.63% at 6,044 in a range of 6,006.40 and 6,052.20. 

Markets were in high anticipation of the Fed this week which vowed to keep using “its full range of tools” to prop up the pandemic-stricken US economy, sending Wall Street higher into the close. 

There were no major surprises and the central bank held policy settings practically unchanged.

Fed committed to using “its full range of tools to support the US economy”

The long and short of the event is that the Fed is committed to using “its full range of tools to support the US economy”.

In the press conference, the Chairman, Jerome Powell, stressed the uncertain economic outlook and noted a slowdown indicated by the high-frequency data.

He said the Fed is “totally focused” on providing the economy with the support it needs, and the economy will likely need the highly accommodative policy for an extended period.

Wall Street was content with the meeting and outcome and US stocks have buoyed sentiment in Asia,

Meanwhile, while a strong performance from domestic iron ore miners also boosted domestic stocks.

Heavyweights Rio Tinto RIO and Fortescue Metals Group FMG beat expectations to post solid results as demand recovers in China for the steel-making material.

Financials were also rising to the occasion with a 1% spike with the “Big Four” banks all trading in positive territory.

US tech giants have also lifted the Australian technology complex with the.AXIJ the following suit to put on as much as 2.5% and mark their best session more than a week.  

ASX 200 Index extending the daily correction

The index is trading in a bearish wedge formation and is resisted in the 6,150s. 

The index has completed a 61.8% Fibonacci of the 2020 rout which could’ve respected to hold the corrective progress.

To the downside, 5,890 guards 5,721 June corrective lows.