Equities finished higher Tuesday, as investors took advantage of the past month’s pullback to buy shares in cyclical shares on growing confidence that Greece’s government will avoid a sovereign-debt default.
The Dow Jones Industrial Avera ge advanced 109.63 points to close at 12,190.01. The Standard & Poor’s 500 Index gained 17.16 points to 1,295.52, for its best one-day gain since April 20. The technology-heavy Nasdaq Composite rose 57.60 points to 2,687.26 for its largest one-day percent gain since Oct. 5.Investors are trading on the confidence that Greece will enact measures needed to stave off a default. After the close of U.S. markets, Greek Prime Minister George Papandreou and his government survived a no-confidence vote as they try to shore up support for economic reforms. The vote came just days after a mass protest over new government cutbacks shook Greece’s political establishment. The euro fell slightly following the result of the vote trading at $1.4372, compared with $1.4402 before results.
The rally was unaffected by expected bad housing data. The National Association of Realtors said sales of existing single-family homes and condos fell 3.8% in May to a seasonally adjusted annual rate of 4.81 million, in line with economists’ forecasts for a drop to 4.8 million. Still, Greece is expected to get its next quarterly instalment of bailout money as long as the country’s Parliament passes a contentious package of budget measures
Today’s Important Economic Announcements (GMT)
8:30 AM GBP MPC Meeting Minutes
9:00 AM CHF ZEW Economic Expectations
9:00 AM EUR Industrial New Orders m/m
2:30 PM Crude Oil Crude Oil Inventories
4:30 PM USD FOMC Statement & Federal Funds Rate
6:15 PM USD FOMC Press Conference
Forex & Commodities Technical Analysis
EUR/USD
On Tuesday the EUR/USD lifted after the Greece confidence vote with 130 pips. The European currency appreciated from 1.4303 to 1.4436 yesterday. Today, the US economy will be publishing its recent decision regarding short-term interest rates, known as the Federal Funds Rate. A rate adjustment is not expected given the sentiment expressed by the Fed in recent weeks. Any hawkishness expressed could lead to further risk taking and drive the USD lower as the week moves ahead. Further strength is expected in the next 24 hours.
Stop Loss: 1.4341
Take Profit: 1.4435
GBP/USD
The British pound was seen trading higher yesterday following news of stable growth in the island economy’s industrial orders expectations and an unexpected slowdown in the growth of the nation’s budget deficit. With today’s interest rate vote scheduled, many traders are anticipated heightened volatility. Today’s monetary policy vote by the Bank of England will help many forex investors get a feel for how the central bank is going to address recent short-falls in employment and manufacturing. Bearish signals suggest the negative economic data is likely to push the market lower.
Stop Loss: 1.6258
Take Profit: 1.6178
AUD/USD
The AUD was heading north yesterday after news began to shift many traders back into riskier assets. The Aussie has been a top performer these past several months considering many traders bank on a strengthening of the AUD due to a rise in Chinese demand for Australian raw materials. The Reserve Bank of Australia released its latest monetary policy meeting minutes which revealed significant dovish sentiment by several members of its policy committee. The sentiment will likely result in a hold on future rate adjustments, and therefore will weaken the AUD over time.
Stop Loss: 1.0619
Take Profit: 1.0540
Published by www.SolidityBrokers.com
