The Dow Jones Industrial Average fell 290 points this week to 12,151.26. It was the benchmark’s fifth straight weekly decline, its longest losing streak since 2004. So far this year, however, it is up almost 5%. The Nasdaq Composite fell 64 points this week to close at 2,732.78. It has fallen for the third week in a row and four of the last five weeks. Year-to-date, it is up 3%. The S&P 500 was down 31 points this week to 1,300.16, but is up 3.4% in 2011. Markets have to have a cautious approach right now and earnings expectations have been extremely high, while the economy’s slowing, and that means something has to give. We suspect that earnings expectations will be revised downward.
Crude-oil futures edged lower Friday as disappointing employment data fuelled concerns about the U.S. economy and energy demand, but a weaker dollar supported prices. Oil fell 18 cents to $100.22 a barrel on the New York Mercantile Exchange. For the week, oil lost 0.4%.Markets were under “a lot of pressure” earlier on a dismal jobs report, but a rising euro that knocked the dollar likely provided a floor to prices. Add to that the surprise increase in weekly crude supplies reported by the Energy Information Administration on Thursday, and the market looks more comfortable near $94 than $104.
Today’s Important Economic Announcements (GMT)
7:30 AM USD FOMC Member Plosser Speaks
12:30 PM CAD Building Permits m/m
2:00 PM CAD Ivey PMI
5:15 PM USD Treasury Sec Geithner Speaks
9:30 PM USD FOMC Member Fisher Speaks
11:00 PM GBP BRC Retail Sales Monitor y/y
Forex & Commodities Technical Analysis
Natural Gas
July natural gas was down 9 cents at $4.71 per million British thermal units. On the week, natural gas gained 4%. Earlier this week, natural-gas futures rallied on warmer-than-usual weather in key energy-consuming U.S. markets. As hot temperatures are expected to moderate next week, however, prices “might fall back from current levels. Natural gas prices will continue to be high for the season, however for now it seems that the rising prices are coming from different reasons – mainly over the concerns over the damage that might have caused the tornados. We speculate that current natural gas prices might further rise, moderately, as long as crude oil prices will remain high.
Stop Loss: 4.62
Take Profit: 4.80
AUD/USD
The Australian economy suffered a significant contraction through the first quarter of the year according to recently released data; and the flood-related weakness could carry forward in the form of weak growth. We should ask whether this is concerning enough to lead the RBA to consider accommodation. It is unlikely for now; but should China falter and capital markets ease, this may not be a far-fetched probability. AUD/USD has reached the upper border of the price channel on 4-hour chart. Our forecast calls for a pullback towards the support at 1.0587. That being said, we advise our traders to always use a safe stop-loss when trading this volatile pair as it could surprise everybody by suddenly spiking in price.
Stop Loss: 1.0772
Take Profit: 1.0606
GBP/USD
The Bank of England will once again try to steal the ECB’s thunder (the MPC’s announcement comes before its European counterpart), and once again fail. The market is expecting no change as there is little to nudge the group to alter its stubborn refusal of inflation pressures. And, this time around, there is little outlier speculation of a surprise hike; so we immediately expect the same surprise selling that resulted last time. GBP/USD had reached a cycle bottom at 1.6286 on 4-hour chart. Further rise is possible later today. We are likely to reach the local resistance at 1.6546 in the next 24 hours.
Stop Loss: 1.6390
Published by www.SolidityBrokers.com
