On Wednesday trading session, the U.S. dollar lost ground again against the Euro, as the U.S. stock market went bullish. In this sense, it is important to note that in early trading session Wall Street was bearish because we observed how the Chinese Sock Market collapsed. China�s stock market really affected the European and Asian stock market, but did not succeed to affect Wall Sreet, as the US stock market close the trading session bullish. In China the Shangahi Composite was two moths low, and concern continue in the China stock market. Nevertheless the Dow Jones went up 0.66%, while the U.S. S&P 500 advanced 0.69% and the NASDAQ, which represents the main technological companies in the field of internet gained 0.68%.
Yesterday the U.S. Crude Oil Inventories showed a number of -8.4 million, instead of the forecasted number of 1.1 million. The Crude Oil Inventories determine the weekly increase in barrels of commercial Crude Oil held in inventory by U.S. firms. And this way the Crude Oil Value advanced 5%. The Crude Oil Inventories really took the market by surprise, with this big fall of the Crude Oil Inventories. As the Crude Oil Value went bullish, Exxon Mobil Corp and Chevron Corp� shares , which are represented on the Dow Jones, were the companies that boosted this index. As for today, the U.S. Weekly Unemployment Claims will be published, which determine the amount of individuals who filed for unemployment insurance for the first time during the past week and is forecasted a number of 548K. As well, the Philadelphia Fed Manufacturing Index will be published today, which determine the general business conditions of manufacturers in the Philadelphia Federal Reserve district and is forecasted a number of -1.9. Finally, the CB Leading Index will be issue with and estimated reading of 0.6%. As for tomorrow we are waiting the Existing Home Sales numbers, which determines the annualized level of existing residential buildings that were sold during the last month.
Yesterday Warren Buffett stated at the New York Times that the US economy is improving but a slowly pace. Also Warren said that the US should take measures against the collateral effects of the US financial stimulus packages, because the governmental deficit will rise. And this way he stated that when we finally observed economical growth, the US Congress should finished increasing the debts in relationship with the GDP. These comments were in the same line with the IMF Economic Chief, and also the main Retail Sales Companies in the US informed that American consumers are tightening its personal finances and because of that the importance of the foreigner demands. The US is going trough one of the biggest crisis since the Big Depression of the thirties and consumers worry for the unemployment, and credit facilities, in consequence the spending is affected. Spending represents 70% of the US economy. Wall Street and the US dollar are showing signs a strong relationship, and because of that you should pay attention to the American stock market evolution.
EUR:
During Wednesday�s trading session, the Euro strengthened against the U.S. dollar and the Sterling, as the US stock market went bullish. Yesterday the German Producer Price Index (PPI), which determines the rate of inflation experienced by manufacturers when purchasing goods and services show a number of -1.5%, well below the forecasted number of -0.1%. Also the European Current Account, which determines the quarterly difference in worth between imported and exported goods, services, income flows, and unilateral transfers was published at -5.3 billion when was estimated at -1.7 billon. Nevertheless the Euro went bullish against the Sterling because some concerns are emerging inside the BoE. Yesterday the Act Meeting Minutes of the Bank of England was published and the will of some members to increase quantitative measure affected greatly to the Sterling. As for today won�t be risky events coming from the Euro Zone, but tomorrow will be announced the PMI data for the entire region, and for Germany and France. Investors will follow these numbers carefully. It is estimated that the Euro will go bullish if the German PMI numbers improved. German indices are key for predicting the Euro evolution as Germany carries a big economical weight in the Euro Zone. Nevertheless, PMI data from France and the Euro Zone will have a meaningful role as well.
GBP:
During Yesterday�s trading session, the Sterling lost ground against the U.S. dollar and the Euro, as the US stock market went bullish. Yesterday the demand for the US dollar as heaven currency was down, meanwhile risky currencies as the Euro went up. Yesterday the Act Meeting Minutes of the Bank of England was published and the will of some members to increase quantitative measures affected greatly to the Sterling. Some concerns was seen by the MPC members, and as we know on the last session of the MPC they decided to rise quantitative measures, but some members were discomforted and wanted a high injection of money in the economy. This way Bank of England is showing concern about the economic situation is the UK. Because of that the Sterling went bearish against the Euro and the US dollar. Yesterday the CBI Industrial Order Expectations showed a reading of -54 when was expected at -50, this index also affected the Sterling on the battle field. As for Today will be published the Retail Sales, which determines the worth of sales at the Retail Level and is estimated at 0,3%. Also the Public Sector Net Borrowing, which determines the difference between spending and income for the government and public corporations is estimated at 0,3 billion. It is expected that today Sterling trend will determine by the British Risky Events and the Euro Evolution
JPY:
During Wednesday�s trading session, the Japanese Yen advanced against the US dollar and most of the mayor currencies, as China�s stock market really affected the European and Asian stock markets, and investors keep its capital on safe heaven currencies like the Japanese Yen. During yesterday trading session Crude Oil Barrel advanced 4.7 % and closed at 72.42 USD per barrel, gaining 3.23 USD. The U.S. Crude Oil Inventories showed a number of -8.4 million, number which really took the market by surprise, which represents a great fall of the Crude Oil Inventories. In consequence because the fall of the Curde Oil inventories, Crude Oil Value was boosted. The last two trading sessions the Crude Oil Value accumulated and advanced 5.67 USD or 8.5%. According the US Department of Energy, Crude Oil Reserves fall 8,4 million last week, an unexpected fall for this year, mainly because Crude Oil Inventories were up for weeks. Some analysts estimated that Crude Oil Value will continue this uptrend. And this way the US dollar fell down, as Crude Oil Value is denominated in US dollars.
A Surprise In The Markets, While Safe Haven Dollar Continues To Swoon.
XAU/USD:
At the moment, Gold is still in a downtrend. The daily shows us a great buying tail yesterday. We can easily climb to just over 950 before we start to feel resistance. Yesterday it seemed like the whole world �believed� that the dark days were over and the markets jumped for joy. Play this with caution as any negative news can send us spiraling downwards. Resistance 948.60, 951.50 Support 932.70, 930.54, 925.91
SPX/USD:
On this one hour chart, notice how the last candle has a great buying tail. We opened high, sellers came in and tried to take the market down into the close, but they failed. Buying prevailed and pushed the close almost right back to the opening of the candle. I would expect another attempt to push past 999.61. However, if market sentiment reverts back to bearish, expect an attempt to push back down towards 992.40 and 991.20. Trading past those small support levels could send us lower to 985 and 978.51.
EUR/USD:
Looking at the four hour chart, we see the formation of a bullish pendant. A strong push upwards followed by a few smaller weaker candles. If the USD continues to weaken this will be all the confirmation necessary to send us to previously seen levels of 1.4267 and 1.4327. Support 1.4207 with a strong solid support at 1.4046.
GBP/USD:
Resistance, 1.6597, 1.6744 Support 1.6311, 1.5984. Trading the channel can be frustrating, but if you enter near support and resistance you can buy and sell over and over again, until it finally does break out. Just be consistent, protect yourself against any breakouts by placing stops just outside the range that we have seen the last little while.