U.S. stocks ended a choppy session modestly higher Wednesday, finding support from strength in oil prices and technology shares as a decline in the financial sector kept gains in check. The Dow Jones Industrial Average closed up 7.41 points at 12,270.99. The Nasdaq Composite Index gained 16.73 points at 2,761.52 while the Standard & Poor’s 500 Index rose 0.25 point to end at 1,314.41. On Wednesday Federal Reserve’s latest survey proved fractionally more upbeat on the economy than has been seen in prior reports. With the exception of housing market, all American industries are performing well.
After a two-day selloff oil prices rose, finishing 86 cents higher at $107.11 a barrel on the New York Mercantile Exchange. The contract had shed 3% to finish at $106.25 on Tuesday. The Energy Information Administration reported crude oil inventories rose 1.6 million barrels in the week ended April 8. This supply announcement was expected by analysts and therefore didn’t have significant impact on the bullish sentiment. Crude futures had traded at $106.55 a barrel before the report. A break above resistance could possibly lead to $110 one more time, but we remain sceptical.
The Japanese Yen fell against most of its major currency counterparts on Wednesday on a rising risk-taking in the market. The Japanese currency fell in response to global equity market gains. The Yen weakened today after appreciating for four straight days, in light of the concerns regarding the euro-zone debt crisis and the ongoing nuclear crisis in Japan, which has boosted demand for the Yen as a safe-haven. Today, the most significant economic release looks to be the U.S. weekly Unemployment Claims. Analysts are forecasting that the U.S. labor market continued to improve during the past week. In this case, the trend of higher risk-taking is likely to proceed and further weaken the Yen.
Today’s Important Economic Announcements (GMT)
9:00 AM EUR ECB Monthly Bulletin
10:00 AM CHF ZEW Economic Expectations
1:30 PM CAD Manufacturing Sales
1:30 PM CHF Gov Board Member Danthine Speaks
1:30 PM USD PPI m/m & Unemployment Claims
3:30 PM Natural Gas Natural Gas Storage
5:30 PM USD FOMC Member Plosser Speaks
USD/CHF
This pair fell today to test the 0.8930 area, and looks as if it is moving lower. USDCHF’s fall from 0.9339 extended further to as low as 0.8928. Another fall towards 0.8922 previous low is still possible, a breakdown below this level will confirm that the long term downtrend from 1.1730 (Jun 1, 2010 high) has resumed, and then the following downward move could bring price to 0.8500 area. Resistance is at 0.9050, only break above this level could bring price back to 0.9200 zone. The pair looks likely to reach the all-time lows again. The strong down trend looks to be intact still, and a new bullish move isn’t expected anytime soon.
Stop Loss: 0.8984
Take Profit: 0.8900
USD/JPY
The USDJPY moved higher as the yen headed lower versus dollar as the risk aversion eased. The Japanese government cut its assessment for the economy for the first time in six months which weakened the status of the yen on the fragile state of the economy compared to its peers. The Bank of Japan agreed to introduce more funds and to intervene in the financial market if needed, as the BOJ is trying to revive the economy from its worst phase after the massive quake that hit Japan on 11 March. The pair’s fall from 85.51 extended further to as low as 83.28. Deeper decline is still possible later today, and next target would be at 82.50-83.00 area. Resistance is at 84.25.
Stop Loss: 84.22
Take Profit: 82.90
Gold
Gold extended gains on Thursday as the U.S. dollar held near a 16-month low against a basket of currencies. Spot gold closed the trading day at $1,456.39 an ounce. It previously hit a record above $1,476 an ounce on Monday on hopes the U.S. dollar would stay weak and that the Federal Reserve would stick to its super-easy monetary policy. Gold’s decade-long price rally could take the metal above $1,600 an ounce by year-end. For the short term traders, we recommend selling this commodity with a relatively close take-profit.
Stop Loss: 1,465.21
Take Profit: 1,445.13
Written by SolidityBrokers.com
