U.S. stocks rose for a fourth consecutive session Tuesday as optimism about financial help ahead for Greece offset earlier pressure from a disappointing reading on consumer confidence, but the benchmark indexes couldn’t recover their losses for the month of May. While today’s economic releases were somewhat disappointing, news on the prospects of a Greece bailout has encouraged broad risk taking. It’s just a volatile trading environment right now ahead of important macroeconomic data this week, including unemployment figures.
With signs of the global economy losing momentum, investors need to prepare themselves for what could be a bumpy ride in the short-term. The Dow Jones Industrial Average closed near the session’s high, up 128.21 points to 12,569.79, leaving the blue-chip index with a 1.9% loss for May — its first monthly decline in six months. Off 1.4% for the month, the S&P 500 Index added 14.10 points to 1,345.20 while the Nasdaq Composite Index gained 38.44 points to 2,835.30. It logged a 1.3% decline for the month.
Oil futures rose Tuesday as fresh hope that Europe could be moving closer to a solution to its sovereign-debt woes lifted the euro against the dollar, helping dollar-denominated commodities.
Crude for July delivery gained $2.11 to $102.70 a barrel on the New York Mercantile Exchange. That was oil’s highest settlement since May 10. It’s higher mainly in response to a weaker dollar. Oil lost some steam as a closely followed housing index showed U.S. home prices falling in March, confirming a double-dip recession for the housing market.
Today’s Important Economic Announcements (GMT)
6:30 AM AUD Commodity Prices y/y
7:15 AM CHF Retail Sales y/y
7:30 AM CHF SVME PMI
8:30 AM GBP Manufacturing PMI
12:15 PM USD ADP Non-Farm Employment Change
1:00 PM EUR ECB President Trichet Speaks
2:00 PM USD ISM Manufacturing PMI & Treasury Geithner Speaks
5:35 PM GBP MPC Member Tucker Speaks
11:50 PM JPY Capital Spending q/y
Forex & Commodities Technical Analysis
USD/CAD
The Canadian dollar has had a remarkable star to this week. On Monday, the nation’s first quarter GDP reading showed activity for the world’s 11th largest economy was running at a clip that was far more impressive than its US and developed world counterparts. This past sessions, rate expectations returned with the BoC’s suggestion that rates will rise “eventually.” This is a very tentative warnings; so its influence will likely ease. USD/CAD’s fall from 0.9816 extended to as low as 0.9655. Deeper decline to test 0.9639 key support is likely to be seen later today.
Stop Loss: 0.9719
Take Profit: 0.9639
AUD/USD
The Australian economy reported its biggest quarterly contraction in two decades with its first quarter report; and yet, the Aussie dollar advanced immediately after the reading. What is the disconnect? While the drop was sharp, the 1.2 percent decline was just a tick worse than the official consensus. What’s more, this contraction is unlikely to lead to a sustained recession; and more importantly, it won’t weigh lead to a rate cut. Being contained by the upper border of the price channel on 4-hour chart, AUD/USD pulled back from 1.0756, suggesting that a cycle top is being formed. Now, deeper decline towards 1.0687 is expected in next few days.
Stop Loss: 1.0756
Take Profit: 1.0687
Crude Oil
A rising dollar for most of the month pushed investors to unwind trades linking a lower dollar to rising commodity prices. A series of market-cooling measures to rein in speculation in silver and energy products helped dampen sentiment about oil, as did the mostly weak or mixed macroeconomic data this month. OPEC will have to “walk a tightrope” this meeting more so than other years and we think we’ll get a token production out of it. OPEC cannot increase production too much or it would risk a price collapse, but it can’t decrease production too much without risking pushing prices too high. For the next 24 hours we are predicting a technical correction back towards the $100 level.
Stop Loss: 103.5
Take Profit: 101.5
Published by www.SolidityBrokers.com
