Simplicity at its Best
Thursday, February 26, 2009
After yesterday’s indecisive U.S stock session, the major indices gapped up at the start of today’s trading day, pushed by news that the U.S government might once again back up the financial system.
According to a press release, President Barack Obama proposed another stimulus package Thursday morning, one that could further aid the financial problems. In addition, large corporations released notes, mentioning that they intend to cut down on their costs and their operations.
Investors immediately saw the buying opportunity, as bullish investors came out of hibernation grabbing up beaten down stocks. Short selling in the market has added to the strain and losses over the last couple of months, forcing the major indices to drop by double digit numbers. Some analysts are now claiming that despite economic data showing a further downfall in the economy, many stocks are currently trading at discount levels.
New Home sales continued to show a troubling situation earlier today, while U.S claims for state unemployment unexpectedly jumped last week to a 26 high of 667,000. In addition Durable-goods orders dropped by 5.2% in January and were down 26.4% in annual terms.
With the Fed’s recent comments, hinting that 2010 could present an economic turnaround and their recent testimony, mentioning that the nationalization of privately held banks was an unlikely scenario, investors are now contemplating as to whether the markets have reached a bottom, especially as economic data continues to paint a gloomy picture.
On the Forex market, the major indices continue to trade within ranging patterns. As mentioned in previous articles, the USD/JPY has presented Forex traders with the most movement, whereas the rest of the currency pair’s movements remain capped. The Dollar index continues to remain with its 85-88 range. In addition, as mentioned on dodjit’s previous videos, the GBP/USD continues to remain one of our favorite currencies due to its predicable price movement. After climbing higher the GBP/USD yet again lost its strength, bouncing off trend line resistance (simplicity at its best). Even though Weak economic data continues to weigh on the pound, support does seem to be forming around current levels (1.4099), which could lead to a tighter range pattern.
Crude oil raced higher, opening the day with increasing buying activity from the Asian market. After forming support around $35 per barrel, this black gold made an astonishing come-back, now trading just off $45 per barrel. While some strength-indicators still have further room to gain, stochastics are starting to turn, which could lead to a minor pullback on the smaller time frames.
Looking forward, Japan’s economy will be scrutinized later on today as they are releasing crucial inflation data and their unemployment levels. In addition eyes will focus on Japan’s manufacturing levels, especially as it has decreased dramatically over the last couple of months.
GBP/USD - Range
Market Pivot Points
Thursday, February 26, 2009
After yesterday’s indecisive U.S stock session, the major indices gapped up at the start of today’s trading day, pushed by news that the U.S government might once again back up the financial system.
According to a press release, President Barack Obama proposed another stimulus package Thursday morning, one that could further aid the financial problems. In addition, large corporations released notes, mentioning that they intend to cut down on their costs and their operations.
Investors immediately saw the buying opportunity, as bullish investors came out of hibernation grabbing up beaten down stocks. Short selling in the market has added to the strain and losses over the last couple of months, forcing the major indices to drop by double digit numbers. Some analysts are now claiming that despite economic data showing a further downfall in the economy, many stocks are currently trading at discount levels.
New Home sales continued to show a troubling situation earlier today, while U.S claims for state unemployment unexpectedly jumped last week to a 26 high of 667,000. In addition Durable-goods orders dropped by 5.2% in January and were down 26.4% in annual terms.
With the Fed’s recent comments, hinting that 2010 could present an economic turnaround and their recent testimony, mentioning that the nationalization of privately held banks was an unlikely scenario, investors are now contemplating as to whether the markets have reached a bottom, especially as economic data continues to paint a gloomy picture.
On the Forex market, the major indices continue to trade within ranging patterns. As mentioned in previous articles, the USD/JPY has presented Forex traders with the most movement, whereas the rest of the currency pair’s movements remain capped. The Dollar index continues to remain with its 85-88 range. In addition, as mentioned on dodjit’s previous videos, the GBP/USD continues to remain one of our favorite currencies due to its predicable price movement. After climbing higher the GBP/USD yet again lost its strength, bouncing off trend line resistance (simplicity at its best). Even though Weak economic data continues to weigh on the pound, support does seem to be forming around current levels (1.4099), which could lead to a tighter range pattern.
Crude oil raced higher, opening the day with increasing buying activity from the Asian market. After forming support around $35 per barrel, this black gold made an astonishing come-back, now trading just off $45 per barrel. While some strength-indicators still have further room to gain, stochastics are starting to turn, which could lead to a minor pullback on the smaller time frames.
Looking forward, Japan’s economy will be scrutinized later on today as they are releasing crucial inflation data and their unemployment levels. In addition eyes will focus on Japan’s manufacturing levels, especially as it has decreased dramatically over the last couple of months.
GBP/USD - Range
Market Pivot Points