Market Movers of the Day
Europe
*EU Consumer Price Index worse than expected at 0.2%
*EU Core Consumer Price Index at 1.2%, in line with market estimations
Americas
*US Retail Sales at 1.4%, better than forecasted
*US Retail Sales ex. Autos below expectations at 0.2%
*US Empire State Manufacturing Survey worse than expected at 23.5
*US Fed’s Chairman Bernanke speech
The Overall Sentiment
Equities
US stock markets rallied boosted by better-than-expected Retail Sales figures and the assurance of Asian countries to keep stimulus policies in place. The Dow advanced 1.3% and the S&P added 1.5% reaching its highest level in 13 months. Energy companies were on the driver’s seat as oil climbed the most in four weeks. The positive sentiment was felt all across the globe as the APEC members expressed their commitment to maintain stimulus measures to support the recovery of their national economies. In Europe the DAX advanced 2.1% and the FTSE 100 rose 1.6% hitting a 14-month high. Japanese Nikkei 225 gained 0.3%.
Forex
The Dollar continues to weaken remaining slightly above 15-month lows against its major counterparts. During Europe’s trading hours the greenback remained little changed even with the release of a weak CPI for the Euro-zone. Later on, as chairman Bernanke reassured the Fed’s commitment to a strong Dollar the greenback spiked. The move was rapidly reversed as Bernanke’s pessimistic views about a slow economic recovery was interpreted by traders as grounds for the US central bank to keep low interest rates and quantitative easing policies for as long as possible. The EUR/USD jumped to an intraday high above 1.50 but corrected to remain expectant slightly below this psychological level. The Pound was the best performer of the day versus its US peer trading above 1.68, its highest levels in 3 months. The currencies tied to commodities advanced as Oil rallied and Gold hit a new record high. The Aussie dollar briefly topped above 0.94 reaching a fresh 15-month intraday high but corrected to settle around 0.9360 ahead of RBA’s Monthly Minutes. USD/JPY lost strongly consolidating around 89, its lowest level in a month.
Commodities
Gold hit a new record once again trading above $1143 as investors turn to alternative investments to the weakening Dollar. Silver soared to top above $18.40 reaching its highest level in 15 months. Crude Oil rallied touching the $80 mark to finally close around $79.50.
The Day Ahead
The day will start with the Reserve Bank of Australia’s Monthly Minutes which will be followed by traders to assess the pace of rate hikes and removal of monetary stimulus. During the European session Swiss Retail Sales and UK CPI figures will be released followed by the Euro-zone Trade Balance, in which better-than-expected numbers could send the EUR/USD to test the 1.50 once again. Moving to the US, Produce Price Index, Treasury International Capital Flows report and Industrial Production are due for release.
Technical Analysis
NZD/USD DAILY
After topping at 0.7629 NZD/USD corrected finding support just below 0.71. It regained strength developing a new bullish attempt to reach for higher highs. The following sessions should be closely followed for the opportunity to join the uptrend wave or the chance to go Short if the break fails and a double-top formation appears.
Daily Forex 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.
