Market Movers of the Day
Europe
*UK Retail Sales better than expected with a 3.3% rise on an annualized basis
*UK Public Sector Net Borrowing worse than expected at 8.0B pounds
Americas
*US Initial Jobless Claims worse than expected at 576K
*US Leading Indicators rose 0.6% in July
*US Philadelphia Fed Manufacturing Index surprised for the better climbing to 4.2
*Canadian Wholesale Sales rose in June 0.6%
The Overall Sentiment
US stock markets had a positive day on very low August-like volume with the S&P rising 1.1% and the Dow climbing 0.8% led by AIG’s robust gain of 21% on its executive’s belief that the company will be able to pay back government’s bailout. US Jobless Claims surprised for the worst rising to 576K but the Philadelphia Fed Manufacturing Index rose for the first time in almost a year and the Leading Indicators climbed in July completing four months in a row of gains adding to signs that economy is stabilizing. Treasury Secretary Timothy Geithner stated that the recovery of the US economy is still in its early hours. In the UK the budget deficit hit a new record in July at 8.0 billion pounds arising worries that the country’s debt selling may have to be expanded. The release of this figure overshadowed the improvement shown on UK Retail Sales and pushed the Pound lower against most majors. The Canadian Dollar climbed for a third straight day as the Canadian Wholesale Sales climbed in June in a positive day for risk seekers with the Australian and New Zealand dollars rising as well.
The Day Ahead
The day will start with Germany’s Purchasing Manager Index Manufacturing showing the current health of business in the manufacturing sector which is seen as an important indicator of the overall economic condition as it is a large portion of the country’s GDP. Shortly after Germany’s PMI the Euro-zone’s PMI will also be released. In the US market eyes will be focused on the Existing Home Sales figures where if the gain that the market is predicting comes to reality the Dollar may drop for a fourth straight day.
Technical Analysis
NZD/USD DAILY
NZD/USD initiated a bullish trend at the start of this year’s second quarter and hasn’t looked back ever since. The pair has recently approached the uptrend support line at 0.6642 and then again at 0.6663 but showed no signs of slowing down. The previous high for NZD/USD was at 0.6885 and as bullish momentum is still in place it is expected to go for new highs once again.
GOLD DAILY
Gold maintains its intentions of reaching the $1000 mark moving along a bullish trend that initiated in late April. The last attempt encountered resistance at the $965-$970 area, the last obstacle standing that’s stopping the metal from getting the four-digit label. Gold corrected from $970 touching the support line once again at $930, making it a good occasion for the bulls to enter the market.
Support/Resistance
Currency | Support II | Support I | Spot | Resistance I | Resistance II |
EUR/USD | 1.405 | 1.41 | 1.4249 | 1.43 | 1.44 |
GBP/USD | 1.6 | 1.6250 | 1.6495 | 1.66 | 1.7 |
USD/CHF | 1.0560 | 1.062 | 1.0633 | 1.0900 | 1.1020 |
USD/JPY | 93.2 | 93.6 | 93.98 | 95.2 | 96.8 |
USD/CAD | 1.04 | 1.0630 | 1.0891 | 1.11 | 1.1365 |
AUD/USD | 0.81 | 0.8170 | 0.8300 | 0.8350 | 0.847 |
EUR/GBP | 0.84 | 0.845 | 0.8639 | 0.8650 | 0.8700 |
NZD/USD | 0.6595 | 0.664 | 0.6763 | 0.676 | 0.69 |
Daily Events
Time(GMT) | Country | Event |
7:30 | Germany | Purchasing Manager Index Manufacturing (Aug) |
7:30 | Germany | Purchasing Manager Index Services (Aug) |
8:00 | Euro-zone | Purchasing Manager Index Manufacturing (Aug) |
8:00 | Euro-zone | Purchasing Manager Index Services (Aug) |
14:00 | US | Existing Home Sales (Jul) |
