Wall Street finished in green territory Tuesday, as investors took advantage of the past month’s pullback to buy shares in cyclical stocks on growing confidence that Greece’s government will avoid a sovereign-debt default. The Dow Jones Industrial Average advanced 109.63 points to close at 12,190.01 while the Standard & Poor’s 500 Index gained 17.16 points to 1,295.52, for its best one-day gain since April 20. The 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.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. European finance ministers also showed modest signs of progress toward a broader agreement for a bigger package of aid to Greece for coming years. Ken Tower, senior analyst at Quantitative Analysis Service, said Tuesday’s rally was the result of a lot of money on the sidelines and investors wanting to put it to work on what appear to be a bottoming process.
Today’s Important Economic Announcements (GMT)
7:00 AM EUR French Flash Manufacturing PMI
7:30 AM EUR German Flash Manufacturing PMI
8:00 AM EUR Flash Manufacturing PMI
8:30 AM GBP BBA Mortgage Approvals
10:00 AM GBP CBI Realized Sales
12:30 PM USD Unemployment Claims
1:15 PM CAD Gov Council Member Murray Speaks
2:00 PM USD New Home Sales
2:30 PM Natural Gas Natural Gas Storage
4:00 PM EUR ECB President Trichet Speaks
Forex & Commodities Technical Analysis
Crude Oil
By now you surely know our daily predictions are very accurate when it comes to oil. Crude oil retreated in electronic trading Wednesday, weighed by a stronger dollar, ahead of a closely watched U.S. inventory report. Crude for August delivery shed 44 cents to $93.67. The American Petroleum Institute said late Tuesday that crude-oil supplies fell by a less-than-expected 81,000 barrels for the week ended June 17 though analysts expect a decrease of 2 million barrels for crude supplies. Commodity traders should watch today’s announcement to a good opportunity to open short positions.
Stop Loss: 95.50
Take Profit: 93.25
USD/CAD
No matter how many times the Bank of Canada telegraphs warnings to the market, the speculative buoyancy behind interest rate forecasts remain. With the BoC’s Financial System Review, the authority said risks had increased and that risk taking had grown more popular. Later in the day, Governor Carney projected slower growth in the “short term”, though he felt the group was not constrained in moving rates. Our technical picture shows the pair has been shuffling in the last few days. USD/CAD had reached a local low which means a rebound is likely. Our forecast calls for a technical correction back up to 0.9837.
Stop Loss: 0.9837
Take Profit: 0.97662
AUD/USD
With Australian economic readings easing through recent months, the first uptick from the Conference Board’s leading indicators composite in four months should come as something of a boon. However, the 0.1 percent increase predominately based on building approvals does little to alter the outlook for a slowdown in activity and rate speculation. Technically, the recent uptrend was limited by the upper border of the price channel on hourly chart. Deeper decline to test 1.0516 support is expected in the next 24 hours.
Stop Loss: 1.0605
Take Profit: 1.516
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