Stocks on Wall Street clawed back from an earlier slide to close higher Thursday, as economic factors pressured the market. New jobless claims rose above 400,000 for the first time in a month with initial claims rising 27,000 to 412,000 for the week ended April, and revised claims for the prior week rose by 3,000 claims to 385,000. By day’s end, the Dow Jones Industrial Average rose 14 points to close at 12,285, after dropping nearly 1% to 12,163 earlier in the session. The Nasdaq Composite Index declined by less than 0.1% to close at 2,760, and the Standard & Poor’s 500 Index rose by 0.1% to 1,315, after touching an intraday low of 1,302.
Crude-oil futures overcame a wobbly start to advance almost 1% Thursday, as a falling dollar and pullbacks earlier in the week worked to support prices. The “Black Gold” gained $1, to $108.11 a barrel on the New York Mercantile Exchange. That was oil’s highest settlement since Monday. Prices had started floor trading in the red but quickly recovered as the dollar tested its lows for the day. On Wednesday, oil benefited from a supply increase that was within expectations; while natural gas joined the gains after its own inventory data were released. The Energy Information Administration said natural gas in storage added 28 billion cubic feet in the week ended April 8.
In the Forex market, the EUR/USD looks for short term breakout, as it prepares for long term reversal. This week has seen modest trends uninterrupted by tame momentum. We await the time that a clear direction meets volatility. When it does, the pair will first trigger a short-term breakout and then perhaps move to a meaningful trend. European Central Bank board member Lorenzo Bini Smaghi warned that restructuring Greece’s debt would cause bank failures in the region according to a transcript released by the central bank, and said that future policy “will depend of the performance of the economy and on inflation” as the economic outlook remains clouded with high uncertainty.
Today’s Important Economic Announcements (GMT)
10:00 AM EUR CPI y/y
1:30 PM USD CPI m/m
1:30 PM USD Empire State Manufacturing Index
2:00 PM USD TIC Long-Term Purchases
2:15 PM USD Capacity Utilization Rate & Industrial Production m/m
2:55 PM USD Prelim UoM Consumer Sentiment
4:15 PM USD FOMC Member Evans Speaks
EUR/USD
As mentioned in the fundamental analysis, Europe is full of economic problems. The ongoing turmoil within the European financial system could lead the Governing Council to delay its exit strategy further as the EU struggles to draw up a solid solution to address the debt crisis in Greece and Portugal. The EUR/USD pared the overnight rally to 1.4513 as record-high financing costs in Europe increased the risk for contagion, and heightening fears surrounding the sovereign debt crisis could spur a near-term reversal in the exchange rate as policy makers struggle to restore investor confidence. Support is at 1.4385, only break below this level will suggest that lengthier consolidation of uptrend is underway, then pullback to 1.4300 area could be seen.
Stop Loss: 1.4513
Take Profit: 1.4385
Crude Oil
The price of oil very definitely broke its upward trend line that has been accompanying the unusual price rises that began with the outbreak of the riots in the Muslim world some two months ago and that are still continuing. The relative calm in Libya served as the trigger for a wave of corrective drops that, for the time being, has brought the price of the black gold from a peak of 113.40 to low rates of 105.50.
Furthermore, strong growth in China – the world’s second-largest oil consumer is bullish for fuel demand, but may stoke concern that Beijing will tighten monetary policy again in moves that could slow consumption. The technical picture remains bearish, so we are confident in our $102 target.
Stop Loss: 110.0
Take Profit: 104.0
USD/CAD
For the past few months, the pair has been travelling south, yet the past few days saw a technical correction upwards. The Loonie should head back lower through the 0.9524 level, its 2011 low and then towards the 0.9500 level, its psychological level. At the time of writing there is a clear divergence in the 4-hour chart, which means the market is about to resume the downtrend. On the upside, USDCAD will have to close above the 0.9664 levels to reduce its broader downside vulnerability and bring further recovery towards the 0.9731 level. That being said, we are extremely bearish at the moment. Short positions with “adventurous” take-profit are strongly encouraged.
Stop Loss: 0.9661
Take Profit: 0.9500
Published by www.SolidityBrokers.com
