By eToro
Housing Data Disappoints, EUR/USD and GBP/USD Hold their Ground
After a lackluster morning yesterday, volatility picked up prior to the U.S open, as economic data disappointed investors. Housing starts and Building Permits both missed analysts’ estimates, coming out at 0.59m and 0.57m, respectively. Even though the numbers were only slightly under market expectations, the data showed investors that despite recent improvement, the housing market is going to encounter bumps in the road to recovery. Analysts’ were expecting a housing start result of 0.61m.
The major indices presented a negative session yesterday, closing with an average loss of -0.5%. Even though names like Apple and Caterpillar showed better than expected results, they failed to drive the indices higher. Caterpillar beat analyst’s estimates mentioning that despite the drop in profit, in the third quarter, the company expects it to be the lowest point and that the equipment giant should get back on its feet in the following quarters.
From a technical point of view, the Dow Jones Industrial Average has presented consolidation around its psychological level. On one hand, this index has failed to present an immediate break of the important level. (This was expected and explained in the previous video briefing). On the other hand, it continues to linger around that level and has so far failed to drop – this is often a good sign for further bullish traders.
Bank of Canada Holds at 0.25%
On the Forex market the Dollar continued to stay in recent trend, but presented a positive day. Investors took advantage of the intraday session and the Dollar’s intraday gains, as a negative session in Wall Street drove traders into the Dollar safe-haven.
Even though the Dollar jumped, the move wasn’t dramatic and most of the pairs ended the day around prior levels. The EUR/USD and the GBP/USD both held on to prior levels, with the GBP/USD trading around it upper trend line, also currently a resistance level. For further analysis on this pair, check out the chart analysis page.
Over in Canada the BOC presented no surprising statement, leaving their rate at a low of 0.25%. Even though the Bank mentioned that their economy is now feeling signs of the global recovery, they stated that they would prefer to sit on the sidelines at this point in time, refraining from intervening with monetary actions.
The Canadian Dollar reacted instantly on the Forex market, losing ground against counterparts. The USD/CAD climbed dramatically throughout the session but continued to remain in its recent downtrend. From a technical point of view the USD/CAD is now coming close to trend line and horizontal resistance, two lines that could put pressure on the recent bounce.
Market Data to Watch Out For
On the Data front, England and the U.S will take the stage today, releasing market moving data. The U.K will start by releasing its MPC meeting minutes. The event could spark movement on the GBP crosses, especially when some of the pairs are trading around critical levels. During afternoon hours, the U.S will take the stage, releasing its MBA mortgage approvals and Beige Book. The report will give details about the state of the 12 Federal Reserve districts covering the entire U.S.
Market Analysis provided by eToro
Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don’t trade with money you can’t afford to lose.
