Stocks broke down a little further today, and given the slowing of its decent we should be poised for a bounce into Friday. We had energy inventory data released today which was fairly bullish, but the main factor for the bounce was OPEC’s decision to not increase output. Crude should bounce along with stocks into Friday, but we will be ready to resell come Sunday.
The ECB has their interest rate decision out in the morning, and even though we anticipated yesterday’s sell-off, it was deeper than expected. This naturally leads us to agree with many analysts that Trichet will most likely not hint towards any increase in rates. Time will tell. We have unemployment claims, trade balance, and wholesale inventories to be reported tomorrow.
Today’s Important Economic Announcements (GMT)
8:30 AM GBP Trade Balance
11:00 AM GBP Official Bank Rate
11:45 AM EUR Minimum Bid Rate
12:30 PM CAD Trade Balance
12:30 PM EUR ECB Press Conference
12:30 PM USD Trade Balance & Unemployment Claims
2:30 PM Natural Gas Natural Gas Storage
6:00 PM USD FOMC Member Plosser Speaks
Forex & Commodities Technical Analysis
Crude Oil
In yesterday’s OPEC meeting the OPEC ministers didn’t come up with a decision today. According to Bloomberg, OPEC members could reach a consensus on whether OPEC should raise oil production or not. OPEC’s official oil production didn’t incline since the beginning of 2009.OPEC is responsible for nearly 40% of the world’s oil supply, and it has 12 members. The “no decision” news is probably among the reasons for the shift in crude oil prices from falls to gains today. The spike in price is not without a likely technical correction. Look to sell crude oil if it jumps to $102, nevertheless further strength is expected today.
Stop Loss: 100.70
Take Profit: 102.08
GBP/USD
Sterling was down on the day against the dollar after the wires showed a Moody’s official saying Britain’s top credit rating could come under review if economic growth continues to deteriorate and if the fiscal program goals fall short. While this isn’t much different from the rating agency’s previous stance that was proclaimed in March, the sharp drop in cable shows how sensitive the forex trading market has become to the rating agencies moves. More weakness is in store for cable as a break of the rising support line at 1.6350 could spur losses to the June low at 1.6280.
Stop Loss: 1.6450
Take Profit: 1.4354
USD/JPY
Intervention talk is floating through the wires as the USD/JPY made its way below the 80 yen mark in overnight trade. The pair is trading at its lowest level since early May but volatility versus both the dollar and in the crosses is far from its pre-intervention levels since mid-March. The Japanese Yen is facing 79.58 support, a breakdown below this level will indicate that the longer term downtrend from 85.51 has resumed, then further fall towards 78.00 could be seen. The pair is likely to head south in the next 24 hours.
Stop Loss: 80.20
Published by www.SolidityBrokers.com
