Wall Street closed in green territory Thursday, pushing the Dow average to its best finish in nearly three years after confidence in corporate results overcame weaker economic data. The Dow Jones Industrial Average closed up 72.35, or 0.6%, to 12,763.31 points, its highest close since May 20, 2008. The Standard & Poor’s 500 Index gained 4.82 points to 1,360.48, with financials the best performer and energy the biggest laggard among its 10 industry groups. The Nasdaq Composite Index edged higher by 2.65 points to 2,872.53, its best since Dec. 12, 2000.
Earlier in the day, the Commerce Department reported the U.S. economy grew at a 1.8% annual rate in the first quarter, softer than the 3.1% pace for the prior three months. Separately, the Labour Department said the number of Americans filing for initial jobless claims last week rose 25,000 to 429,000, the highest total since late January. These data points should not materially affect investor earnings expectations in coming quarters but point to the fact that the economy is growing at a lot slower rate than normally seen during the end of the second year of an economic expansion.
A weaker dollar supported prices against the day’s not-so-positive macro-economic news. Today, traders cannot afford to overlook, a batch of data is expected from the leading economies. Both the German Retail Sales and US Personal Spending will be released at 6:00 GMT and 12:30 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.
Today’s Important Economic Announcements (GMT)
6:00 AM EUR German Retail Sales m/m
8:00 AM CHF SNB Chairman Hildebrand Speaks
8:00 AM EUR M3 Money Supply y/y
9:00 AM EUR CPI Flash Estimate y/y & Unemployment Rate
9:30 AM CHF KOF Economic Barometer
12:30 PM CAD GDP m/m
12:30 PM USD Employment Cost Index q/q & Personal Spending
1:45 PM USD Chicago PMI
4:30 PM USD Fed Chairman Bernanke Speaks
USD/CHF
The dollar fell to a three-year low against major currencies on Thursday on the Federal Reserve’s intention to keep interest rates near zero, while softer-than-expected U.S. jobs and economic data underscored the bearish sentiment. Ultra-loose U.S. monetary policy has been a bane for the dollar and a boon for the Swiss Franc, which is up nearly 11 percent against the U.S. currency so far this year. The U.S. Dollar was lower against the Swiss Franc on Friday. The pair was trading at 0.8732, down 0.04% at time of writing. It is likely to find support at 0.8672, Tuesday’s low, and resistance at 0.8874, Monday’s high. Today, we are expecting a modest technical correction in response to the impressive run so far this week.
Stop Loss: 0.8690
Take Profit: 0.8823
Crude Oil
Crude fell on Friday, after settling at a 31-month high in the previous session, on concerns that slowing growth in top consumer United States may pare demand, but a weaker dollar and unrest in the Middle East helped stem a slide in prices. Still, U.S. crude is heading for a rise of 5.7 percent in April, marking its eighth consecutive month of gains, and the longest run of monthly increases since 1983. A weak dollar, wallowing at three-year lows, helped bolster the “black gold” within sight of historic highs on Friday as investors sought alternative assets. Look for oil to retract further, at least until the end of the week. Prices continue to tread water below resistance at $113.44, the April 11 high, a barrier reinforced by support-turned-resistance at a rising trend line set from the lows in mid-February. Our prediction calls for further decline in crude prices going into the weekend.
Stop Loss: 113.9
Take Profit: 112.1
GBP/AUD
The increasing inflation evident in the United Kingdom increases the possibility for a rise in the local interest rate in the coming months. This, in its turn, is expected to support the British currency against all the other leading currencies in general and against the Australian dollar in particular. As a result, the technical picture of the Pound – Australian dollar pair holds within it an interesting buy possibility.
Entry into a long position for the pair will be possible only in the event that the pair breaks its minor trend line at 1.5360 upwards. Such a break will constitute a trigger for a buy position during the new move of increases that is expected to move towards the significant resistant level of 1.6160. Traders are encouraged to buy the pair with caution.
Stop Loss: 1.5202
Take Profit: 1.5343
Published by www.SolidityBrokers.com
