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Looking Past the Fed’s Statement Today

Discussion in 'Market Predictions and Reports' started by dojit, May 5, 2009.

  1. dojit

    dojit Private

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    The U.S stock market glided higher during yesterday’s session, after soaring at the start of the session. Buyers flooded the market as housing data showed a surprisingly good result and earlier news from Asia stating that ministers ordered an emergency liquidity fund of $120 to help restore confidence, helped boost momentum. The Index of pending home sales rose in March, showing a 3.2% compared to February.

    On the technical side of things the Nasdaq cleared its 200 ma, closing the session above the 1400 mark. The S&P500 soared during the session, breaking through resistance, closing the session above its 900 psychological barrier. Even though intraday charts are showing slightly over bought patterns, a correction might only be minor one, as indicators on larger time scales still show that the bullish trend is intact.
    Pairs are climbing but the overall Index isn’t declining

    On the Forex market, individual pairs presented phenomenal intraday trends yesterday, with the EUR/USD climbing over 150 pips during the afternoon session. Economic data sparked major movement across the board, which ended in major intraday rallies.

    Despite the sharp moves, the Dollar index failed to present any major volatility, clinging on around current levels. The index closed the session lower, but managed to stay above 84 points.

    The USD/CAD continued lower as Canada showed an improving economy, and on speculation that their economy has seen the worst of the economic crisis. While the current downtrend momentum is still showing strength, one must note that this pair has now reached major support of 1.1737, a level that could prevent an immediate break. Even though daily indicators are pointing towards an oversold scenario, the intraday session has so far failed to present any major buying, something that could indicate to further weakness.

    On the other side of the globe Australia took the spot light during the morning hours, releasing a no change status, regarding their interest rate decision. Officials mentioned in their statement that while the short term outlook looks pessimistic, several countries are starting to show signs of stability, something that could help the world economy. In addition, they mentioned that borrowing for housing had picked up, particularly among first-home buyers.

    Even though interest rate decisions are normally a market mover, investors are waiting for the major two events of this week; the ECBs decision and the NFP result on Friday. Recent data is showing the European economy is still weakening, something that could lead the ECB to reduce its fund rate below the critical 1% level.
    Commodities

    Crude oil bounced higher, receiving most of its strength during the U.S session. The commodity that received the most interest was gold climbing by 1.7%. Even though risk appetite is increasing, Gold is still holding its high levels on expectations that recent economic policies could spark inflation down the road. This safe-haven is currently trading around trend line resistance after forming a higher-low on it minor trend.

    Analyses of the charts, including indicators and extra data are avalible at dodjit website
    Market Data to Watch Out For

    Even though a wave of economic data is expected to be released later today, including a testimony from the Fed’s chairman Ben Bernanke, most traders will be looking past the data today preparing for the end of the week. The Fed’s chairman is scheduled to give his comments on the recent economic activity, but many are expecting a more subtle statement this time round, especially as recent data is showing a slight improvement.

    Market Pivot Points
    Analyses of the charts, including indicators and extra data are avalible at dodjit website
     

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