Economic Events 30.07 – 03.08

Monday 30.07

01:00 AUD HIA New Home Sales (MoM)

Forecast:                       Previous: 0.7%

Housing Industry Association (HIA) New Home Sales measures the change in the number of newly constructed homes sold. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

08:50 EUR Italian 10-year BTP Auction

Forecast:                       Previous: 5.82%

The figures displayed in the calendar represent the average yield on the Buoni del Tesoro Poliannuali or BTP auctioned.  Italian BTP bonds have maturities of five, ten, fifteen and thirty years. Governments issue treasuries to borrow money to cover the gap between the amount they receive in taxes and the amount they spend to refinance existing debt and/or to raise capital. The yield on the BTP represents the return an investor will receive by holding the treasury for its entire duration. All bidders receive the same rate at the highest accepted bid. Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at previous auctions of the same security.

10:00 GBP CBI Distributive Trades Survey

Forecast: 15                      Previous: 42

The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease. A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.

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Daily Market Review – UK/EU 30/07/2012

European equities moved into positive territory in the early hours of Monday, with the FTSEurofirst 300 posting a fresh new four-month high as market participants grew increasingly optimistic that the ECB will use more stimulus measures in order to ease the pressure of the high borrowing costs of Spain and Italy. The FTSEurofirst 300 index of largest European stocks added 0.9% to trade at 1,066.42 points, which is the index’s highest level since April. At the same time the Eurozone’s blue chip Euro STOXX 50 index advanced 1.1% to 2,327.46 points, pushing above the key resistance level at its 200-day moving average. The Stoxx Europe 600 index rallied 0.8% to 261.93, adding to the 0.6% gain it posted last week. Air France-KLM was one of the biggest gainers, soaring 8.9%, as the airline announced a 1.26-billion-euro loss for the first half of 2012, but said it expects an improvement in the second half of the year. France’s benchmark index CAC 40 index rallied 1.1% to trade at 3,315.49, propelled higher by BNP Paribas SA, 3.2% higher, and Credit Agricole SA, up 3.1%. Yields on ten-year Spanish government bonds slipped 9 basis points to 6.61%. Spain’s benchmark IBEX 35 index rose 1.4% to 6,710.50. Banco Popular Español SA gained 4.8%, while heavyweight Banco Santander SA advanced 1.8%. In the U.K., HSBC Holdings PLC rallied 0.9%, ahead of its earnings release later in the day. Royal Dutch Shell PLC climbed 0.7%, as oil prices gained, helping the FTSE 100 index move 0.4% higher to 5,651.02. In Germany, most equities were also into green territory, with Deutsche Bank AG among the best performers, adding 2.1%. The DAX 30 index put on 0.6% to trade at 6,730.29. Infineon Technologies AG slipped 0.9% after Jefferies downgraded the stock from buy to hold.

Daily Market Review – Asia 30/07/2012

Asian equities added to the gains they posted last week as market participants hope that the Federal Reserve and the ECB will announce additional measures, aimed at spurring the global growth. The Fed’s two-day rate meeting will begin tomorrow and the decision of the central bank will be announced on Wednesday, while on Thursday we have the results of the ECB policy meeting being released.  Market expectations of the latter are quite high as the central bank’s president Mario Draghi promised to do all that is necessary to protect the integrity of the Eurozone. The FTSE CNBC Asia 100 Index, which tracks the performance of markets across Asia, rose 0.9%. Japan’s Nikkei share average advanced on speculation of further monetary easing and on several strong earnings releases, which supported the market. The Japanese benchmark gained 0.8% to close at 8,635.44 points, while the broader Topix advanced 0.7% to 731.74. The Korea Composite Stock Price Index (KOSPI) added 0.8% to finish at 1,843.79 points, well above its 50-day moving average of 1,833.49 points. Seoul equities rose to their highest close in four weeks, propelled higher by the rising hopes that the debt situation in Europe might improve in the days to come. In Australia the country’s banking sector was one of the best performers in the local market. The benchmark S&P/ASX 200 index advanced 0.9% to close at 4,245.7, adding to the 1.5% gain it posted on Friday. New Zealand’s benchmark NZX 50 index climbed 0.5% to finish at 3,518.8 points. Shanghai stocks end at their lowest level in nearly 41 months, with small- and medium-capitalization stocks falling the most after the Shanghai Exchange announced its plans to make the delisting process easier and simpler in order to restrict speculation. The benchmark Shanghai Composite slipped 0.9% to 2,109.9, its lowest close since March 3rd, 2009. The CSI300 Index of the biggest companies in Shanghai and Shenzhen dropped 0.6%. In Hong Kong, equities finished the Monday session higher, led by a 1.3% advance in HSBC Holdings, which is scheduled to announce its earnings later in the day. The Hang Seng Index gained 1.5% to 19,568.9, outperforming the rest of the Asian markets. The next resistance level on the way up is standing at 19,651.5, where the 200-day moving average is. The index has tried to finish above this resistance since mid-May. India’s benchmark BSE Index and the 50-share NSE Index both gained 1.1%, and are currently on their way to lock their second session of gains, pulled higher by the rally in their peers. In Southeast Asia, Singapore’s Straits Times Index added 0.8%, while Malaysia’s benchmark KL Composite traded almost unchanged.

Daily Market Review – USA 30/07/2012

U.S. equities finished the rather volatile week they had with a sharp advance on Friday. The Dow Jones pushed above 13,000 for the first time since May as market participants started speculating that the Federal Reserve and the ECB will have to use more stimulus measures to spur the global growth. The major indices rose drastically around noon in a response to the reports that the head of the Bundesbank and ECB President might be discussing new tools, aimed at easing the Eurozone’s roaring debt crisis. The Dow Jones Industrial Average jumped 253.09 for the week, or 1.97%, to finish at 13,075.66, pushing above the psychologically-significant 13,000 level for the first time since May, pulled higher by Merck. The S&P 500 added 23.31 points for the week, or 1.71%, to end at 1,385.97. The NASDAQ soared 32.79 points on the week, or 1.12%, to finish at 2,958.09. The CBOE Volatility Index, considered by many as the best indicator of fear in the market, ended below 17. All 10 S&P sectors finished in green territory, pulled higher by health care and industrials. According to the Friday reports of a possible meeting between the Bundesbank’s President and the ECB chief, Mr. Draghi’s proposal may include rate cuts, bond purchases and new LTRO. On Thursday, Mario Draghi said he is willing to take all necessary measures to save the euro and that statement fueled a rally that sent the stocks higher for the week. On the U.S. economic front, consumer sentiment figures beat analysts’ expectations for July. Still, the level they hit was the lowest for the year. At the same time GDP expanded at a 1.5% annual rate in the second quarter. Still, the number marks the weakest pace of growth since the third quarter of last year. Market participants were watching closely the GDP data as they were hoping that a disappointing number will prompt the Fed to be more aggressive in the two-day rate meeting scheduled for later this week. Some traders expect the Federal Reserve to extend the time frame on its forecast for extreme low rates to mid-2015, from the end of 2014.

Dow Jones Industrial Average

As we mentioned above the Dow posted significant gains on Friday when the index managed to close above the psychologically important 13,000 level for the first time since May. The benchmark started the session just below this key level and moved up for the better part of the day. The index finished the session just off of the highs at 13,116.01. Today the futures are pointing to a slightly higher open as market participants are hoping that additional stimulus measures will be announced by the Federal Reserve and the ECB on Wednesday and Thursday respectively. Support in the Dow is provided by the 13,000 level, while resistance, on the other hand, stands at the triple top formation of late March around 13,250. Oscillators are all trending higher with the relative strength index at 72 and the stochastic already in overbought territory, standing at 95. The MACD is approaching the highs it reached in late June, but it still has some room to go before it reaches them.

Gold

Gold extended its advance on Friday after sentiment among investors picked up. The precious metal even tested the resistance at the 1630 level, but failed to push above it and in the second half of the session it pared some of its early gains. Today the bullion is having a choppy session, currently moving slightly lower, but it is well off of the session lows of 1616.09. Support in the precious metal is provided by the 25-period moving average, which is standing at 1607.52, while resistance, on the other hand, continues to stand at 1630. Oscillators are all at the upper bands of their respective ranges with the relative strength index at 64 and the stochastic at 70. The MACD is moving close to the highs it touched in the first couple of trading days of July.

USDJPY

The currency pair finally bounced back from the support level at 78.00 after trying to push below it on several occasions. On Friday we touched highs of 78.68, pushing above both the 25-period and the 50-period moving averages. But the USDJPY was unable to hold on to all its gains and declined in the second half of the session, finishing at 78.45. Today the yen is losing ground once again, pairing almost all gains it posted on Friday. We moved below the 25-period and the 50-period moving averages once again, touching lows of 78.09. Support continues to stand at the 78.00 level, while resistance is provided by the 25-period moving average at 78.25. Oscillators are in mid-range with the relative strength index at 44 and the stochastic at 43. The MACD is moving very close to the key 0 level after rebounding from the lows it reached last week.

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Daily Market Review – UK/EU 27/07/2012

European stocks pared some of their earlier gains, as market participants were concerned that there might be some political opposition to the ECB’s efforts to fight the debt crisis. The FTSEurofirst 300 index even traded in negative territory for a while, erasing 0.1%, before inching back up to trade almost unchanged at 1,042.62 points. The index advanced 2.4% on Thursday, as stock markets rallied after ECB President Mario Draghi announced he will do everything he can to protect the Eurozone from collapsing. The Stoxx Europe 600 index added 0.1% to 256.96. The CAC 40 index put on 0.1% to trade at 3,211.46. Banks were among the biggest gainers, with Barclays PLC climbing 4.4%, outperforming its peers. The British bank posted profits, which beat market expectations and apologized for the recent scandals, in which it was involved. The FTSE 100 index pared its earlier gains to drop 0.1% at 5,565. Miner Anglo American PLC pulled the index lower after the company posted worse-than-expected earnings in the first half of the year, hit hard by the slowing global growth. In Germany, the DAX 30 index dipped 0.3% to 6,561.43, weighed by Deutsche Boerse AG, which dropped 1.8%.

Daily Market Review – Asia 27/07/2012

Asian stocks advanced on Friday, propelled higher by the release of better-than-expected results from smartphone maker Samsung Electronics. But the big news that helped push Asian markets sharply higher was the ECB President Mario Draghi announcement on Thursday that the central bank will use all necessary tools to protect the Eurozone from collapsing. After this announcement market participants rushed to buy risky assets on hopes that the European Central Bank will soon intervene in order to drive Spain’s borrowing costs lower. The FTSE CNBC Asia 100 Index, which tracks the performance of markets across Asia, rallied 2.2%. Seoul stocks were one of the biggest gainers in Asia after Samsung Electronics, the world’s largest technology firm by revenue, announced record high profits for the previous quarter, while screenmaker LG Display topped analysts’ earnings estimates. South Korean equities advanced to a two-and-a-half week closing high, with the Korea Composite Stock Price Index (KOSPI) gaining 2.6% to finish at 1,829.16 points. Japan’s Nikkei share average climbed after a wave of short-covering activity pushed the index higher as the ECB President declared his willingness to fight Europe’s debt problems with all means at his disposal. The Japanese benchmark gained 1.5% to 8,566.64 points while the broader Topix rallied 1.6% to 726.44. Australian stocks also advanced, adding 1.5% to end the week slightly in green territory. The benchmark S&P/ASX 200 index rallied nearly 62.1 points to close at 4,209.8. New Zealand’s benchmark NZX 50 index climbed 0.5% to end the week at 3,501.29. Shanghai equities put an end to a three-day losing streak, as bank shares advanced, offsetting declines in the pharmaceutical companies, but the gains were far from sufficient to stop stocks from declining for a sixth week in a row. The Shanghai Composite edged 0.1% higher for the session, closing at 2,128.8, but the index is still 1.8% down for the week. The CSI300 Index added 0.1% for the day, but lost 2.1% for the week. Hong Kong equities also rose on the short-covering activity that followed yesterday’s news from Europe. The Hang Seng Index advanced 1.9% to 19,249.2 points, with the first significant resistance on the way up standing at 19,259.4, where the highs of July 23 are. The 30-share BSE Index gained 1.8%t to 16,935.60 points, paring some of yesterday’s losses, when it closed at its lowest level since June 6th. The 50-share NSE Index added 1.9% to 5138.15 points. In Southeast Asia, the Singapore’s Straits Times Index climbed 0.2%, while Malaysia’s benchmark KL Composite slipped 0.1%.

Daily Market Review – USA 27/07/2012

U.S. equities posted significant gains in yesterday’s session after several economic data reports came in better than expected and after ECB President Mario Draghi announced that the central bank is willing to take all necessary measures to retain the Eurozone intact. The Dow Jones Industrial Average rallied 211.88 points, or 1.67%, to finish the session at 12,887.93, pulled higher by Home Depot and American Express. The benchmark index is back in green territory for the week and for the month. The S&P 500 added 22.13 points, or 1.65%, to close at 1,360.02. The NASDAQ jumped 39.01 points, or 1.37%, to finish at 2,893.25. Both the S&P 500 and the NASDAQ put an end to a losing streak, which lasted four days. The CBOE Volatility Index, considered by many as the best indicator of fear in the market, dropped to close below 18. All 10 S&P sectors finished higher with telecoms and energy the biggest gainers. Market participants grew increasingly optimistic that the Federal Reserve will have to use more stimulus measures soon, with some investors saying this could happen as early as the rate-setting meeting next week. This optimism provided additional boost to stocks, sending them to their highest level for the week. On the economic front, weekly jobless claims dropped 35,000 to 353,000, which is an almost four-year low. At the same time durable goods orders rose 1.6% as demand for aircraft picked up. Excluding transportation, however, orders for durable goods declined 1.1%, which is their biggest drop since January. Pending home sales disappointed slipping 1.4% for the month of June. About half of S&P 500 companies have announced their quarterly earnings up till now. Of these companies, 65% have beaten analysts’ projections, while 22% have disappointed. At the same time, only 41% have topped revenue expectations. The government issued $29 billion in seven-year notes at a yield as high as 0.954% and bid-to-cover ratio of 2.64.

Dow Jones Industrial Average

As we mentioned above the Dow posted very decent gains yesterday on the news coming from Europe and on the better-than-expected employment numbers for the U.S economy. The benchmark pushed above its 25-period, its 50-period and its 200-period moving averages to trade slightly below the highs we reached on June 20th. Moreover, the blue chip index finished the session close to the highs at 12,887.93 ahead of the GDP data, which is scheduled to be released on Friday. Today futures on the Dow are pointing to a flat open, but there are several earnings announcements and several economic releases, which might push them both lower and higher. Support in the index is provided by the lows around 12,600, which we reached earlier in the week. Resistance, on the other hand, stands at the highs we mentioned, around 12,950. Oscillators are trending up with the relative strength index at 62 and the stochastic already in overbought territory, around 84. The MACD is moving very close to the key 0 level and is issuing buy signals.

Gold

Gold extended its advance yesterday, starting slightly above the psychologically important 1600 level and finishing at 1613.48. The bullion was even trading at 1621.65 at one point during the day, but it failed to hold above 1620 and declined in the Thursday afternoon. Today gold continues trending higher, posting a fresh new high for the week. We are currently standing at 1622.72, just a whisker below the highs we marked in the beginning of the month, when the precious metal hit 1625 dollars per troy ounce. The bulls seem to be dominating the market at this moment, but they are about to meet with the resistance at the highs we reached in mid-June around 1630. Support, on the other hand, is provided by the psychologically important 1600 level. Oscillators are trending higher with the relative strength index approaching the upper band of its range, standing at 72 and the stochastic already in overbought territory, standing at 93. The MACD is well above the key 0 level, approaching the highs it marked in the beginning of the month.

USDJPY

Yesterday the yen tried to finally bounce back from the support at 78.00. The currency pair managed to push above its 25-period moving average and finished close to the highs of 78.35 for the day. Today, however, the USDJPY lost its momentum and it is once again dominated by the bears. We retreated below the 25-period moving average and the dollar is currently changing hands at 78.13 yens, wiping almost all the gains it had posted in the previous day. Support in USDJPY continues to stand at the psychologically important 78.00 level, while resistance, on the other hand, is provided by the 25-period moving average at 78.21. Oscillators are in mid-range with the relative strength index at 42 and the stochastic at 56. The MACD is trending higher and is currently approaching the key 0 level.

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.

Economic Events 23.07 – 27.07

Thursday 26.07

00:10 JPY BoJ Governor Shirakawa Speaks

Bank of Japan (BOJ) Governor Masaaki Shirakawa (April 2008 – April 2013) is to speak. As head of the BOJ, which sets short term interest rates, he has a major influence over the value of the yen. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts. His comments may determine a short-term positive or negative trend.

06:00 EUR GfK german Consumer Climate

Forecast: 5.8              Previous: 5.8

The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.  A higher than expected reading should be taken as positive/bullish for the EUR,while a lower than expected reading should be taken as negative/bearish for the EUR.

 

12:00 BRL Brazilian Unemployment Rate

Forecast: 5.7%       Previous: 5.8%

The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment. A higher than expected reading should be taken as negative/bearish for the BRL, while a lower than expected reading should be taken as positive/bullish for the BRL.

12:30 USD Continuing Jobless Claims

Forecast: 3300K         Previous: 3314K

Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

 

12:30 USD Initial Jobless Claims

Forecast: 381K       Previous: 386K

Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.

12:30 USD Core Durable Goods Orders (MoM)

Forecast: 0.1%       Previous: 0.7%

Core Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, excluding transportation items. Because aircraft orders are very volatile, the core number gives a better gauge of ordering trends. A higher reading indicates increased manufacturing activity. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

12:30 USD Durable Goods Orders (MoM)

Forecast: 0.4%       Previous: 1.3%

Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

14:00 USD Pending Home Sales (MoM)

Forecast: 0.9%            Previous: 5.9%

The National Association of Realtors (NAR) Pending Home Sales Report measures the change in the number of homes under contract to be sold but still awaiting the closing transaction, excluding new construction. A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.

14:00 USD Treasury Secretary Geithner Speaks

U.S. Treasury Secretary Timothy Geithner (January 2009 – January 2013) is to speak. He speaks frequently on a broad range of subjects and his speeches are often used to signal policy shifts to the public and to foreign governments.

23:00 KRW South Korean GDP (QoQ)

Forecast: 0.5%      Previous: 0.9%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

23:00 KRW South Korean GDP (YoY)

Forecast: 2.4%                Previous: 2.8%

Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health. A higher than expected reading should be taken as positive/bullish for the KRW, while a lower than expected reading should be taken as negative/bearish for the KRW.

23:30 JPY Tokyo Core CPI (YoY)

Forecast:0.6%       Previous:0.6%

The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish for the JPY.

 

23:30 JPY Retail Sales (YoY)

Forecast: 1.2%       Previous: 3.6%

Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. A higher than expected reading should be taken as positive/bullish for the JPY, while a lower than expected reading should be taken as negative/bearish

for the JPY.

Daily Market Review – UK/EU 26/07/2012

European equities moved into negative territory on Thursday after choppy first minutes, as some market participants sold stocks on the disappointing corporate earnings and others bought stocks on hopes for further U.S. stimulus measures. The FTSEurofirst 300 traded 0.1% lower, at 1,017.14, with energy giants Royal Dutch Shell and BG Group declining 2.3% and 1.9% respectively, after missing earnings projections. The Stoxx Europe 600 index also inched slightly lower to trade at 250.27. Unilever NV was one of the top performers, gaining 3.6% after posting a decrease in profits, but an increase in sales. The FTSE 100 index was almost unchanged at 5,494.67. The German DAX 30 index slipped 0.5% to 6,375.10, pulled lower by the 3.4% drop in the heavyweight Siemens AG. The company posted disappointing results and issued a negative outlook for the following quarter. The French CAC 40 index was almost unchanged at 3,082.17. The Spain IBEX 35 index dipped 0.3% to 5,985.70, pulled lower by a 4.6% drop for Telefonica SA as the company suspended its dividend in the previous day and announced share buybacks on the worse-than-expected earnings released ahead of schedule. Banco Santander SA gained 1%. The bank announced its net profit dropped 93% as it took a large provision to protect against possible losses on Spanish real estate.

Daily Market Review – USA 26/07/2012

U.S. equities closed yesterday’s session mixed after choppy trading.  Apple underperformed the rest of the market as the tech giant posted earnings that disappointed. The Dow ended the session in green territory, putting an end to its three-day decline. The U.S. benchmark index advanced 58.73 points, or 0.47%, to end at 12,676.05, pulled higher by Boeing and AT&T. The S&P 500 slipped 0.42 points, or 0.03%, to end at 1,337.89. The tech-heavy NASDAQ dipped 8.75 points, or 0.31%, to finish the session at 2,854.24. The CBOE Volatility Index, considered by many as the best indicator of fear in the market, closed below 20. Among the key S&P sectors, telecoms closed in green territory, while techs weighed. Apple bounced back from the lows for the day, but still erased more than 3% after the tech giant missed quarterly results by a significant amount, while, at the same time, the company handed guidance for the current quarter that disappointed investors. To make the matters worse, at least six brokerages decreased their price targets for the company. On the economic front, new home sales declined 8.4% in June to a seasonally adjusted 350,000-unit annual rate. The percent drop was the highest in more than a year. Weekly mortgage applications rose last week as record-low interest rates sparked a new wave of refinancing. Treasuries traded flat after the government auctioned $35 billion worth of five-year notes at a relatively high yield of 0.584% and bid-to-cover of 2.71.

Dow Jones Industrial Average

As we mentioned above the Dow moved higher yesterday, starting at the lows for the session and finishing at 12,676.05. The index traded as high as 12,731.48 at one point during the day, but the benchmark met with some serious resistance at the 200-period moving average and as a result it pared some of its gains towards the end of the session. Today we have a lot of economic data hitting the wires, which are likely to have some effect on U.S. stocks. At the same time earnings for companies such as Facebook, ExxonMobil, 3M, Amgen, Dow Chemicals will be released. Technically speaking, short-term support in the Dow is provided by the 12,600 level, while resistance stands at the 200-period moving average. Oscillators are in mid-range with the relative strength index at 44 and the stochastic at 33. The MACD has just pushed below the key 0 level, but it is not issuing any buy signals yet.

Gold

Gold started yesterday’s session slightly above its 25-period moving average and moved higher all day long. The bullion pushed both beyond its 50-period and its 200-period moving averages to trade at prices above 1600 for the first time since early July. The precious metal hit highs of 1610.35, but closed slightly off of them – at 1603.22. Today we are having a choppy session so far as the bulls are trying to hold to yesterday’s gains. We tried pushing above yesterday’s highs and failed, but we are still trading in positive territory with gold currently changing hands at 1604.44 dollars per troy ounce. Support in the bullion is provided by the 200-period moving average around 1591.60, while resistance, on the other hand, stands at the highs of early July, around 1620. Oscillators are all trending higher with the relative strength index very close to the upper band of its range and the stochastic already in overbought territory, standing at 87. The MACD pushed above the key 0 level, but still remains close to it. The 25-perios and the 50-period moving averages have just entered in a golden cross formation, which technicians believe to be a trend reversal signal.

USDJPY

The currency pair resumed the rangy movement it exhibited in the middle of the month. The bears continue to be strong, but the bulls are also holding their grounds, trying desperately to hold the USDJPY above the key 78.00 level. Yesterday we started slightly above 78.00, pushed to highs of 78.28 for the session and then retracted to the same levels we started at. Today we are having a choppy session, which does not differ significantly from the one we had yesterday. For a brief moment we were trading close to the 25-period moving average, but, after we failed to penetrate above it, we moved lower once again. Support in the USDJPY is provided by the key 78.00 level, while resistance, on the other hand, stands at the 25-period moving average, around 78.23. Oscillators are in mid-range with the relative strength index at 39 and the stochastic at 34. The MACD is trending slightly higher, but still remains below the key 0 level.

Disclaimer:
The information in this analysis is collected from different sources and should serve for informative purposes only. The author shall not be held responsible for the validity of the presented information. No part of this analysis recommends the purchase or sale of a currency pair or any other financial instrument.