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A higher Session, USD/CAD plunges to its 50% fibo level
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The U.S stock market finished the session strongly higher yesterday after the day’s economic data and a pledge from European Union Leaders to help Greece, boosted confidence and encouraged investors to head back into riskier assets.
Even though European leaders are devoted to helping the distressed country, many market participants are now scrutinizing the extent of the bail-out. One must note that until the bail-out occurs, the markets will remain volatile, especially as this is far from a done deal. Policy makers are now trying to figure out the amount of money involved and whether other countries, such as Spain and Portugal will require the same type of help.
Fundamental data also had a positive effect on the session yesterday as the number of people who filed for unemployment benefits in the U.S came out lower than expected at 440.00k compared to 460.00k. Stocks jumped higher throughout the session, after consolidating for the first quarter. The S&P500 finished the session with a gain of 0.97%, while the Dow Jones Industrial Average jumped by 1.05%. The leading sector of the day was materials, climbing by 1.70%.
From a technical point of view, the S&P500 is still within its correction, but is now presenting minor divergence on the various indicators. The current down trend line should be observed as yesterday’s session tried to clear it.
The Dollar Climbs Higher Together with StocksDespite a positive stock session, the Dollar index continued to climb, finishing over 80 points. On individual pairs the EUR/USD dropped but stayed above its recent low, while the GBP/USD traded around prior levels.
The USD/CAD was the major market mover of the session, dropping back to 1.0498. Even though there was no specific reason for the drop, the chart retraced over 50% of its recent uptrend. One must note that the 61.8% Fibonacci level could act as major support.
Market Data to Watch Out For
On the data front the markets will have a lot to digest today, starting with European GDP and ending with the U.S’s retail sales and Michigan Consumer Sentiment Index. Furthermore, Treasury Secretary Geithner will give his comments about the recent market occurrences and economic situation.
To view the full economic calendar click here.
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