Bernanke Took the Spot Light Fed Chairman Ben Bernanke grabbed the headlines during yesterday’s session as President Obama nominated him to for a second term as the Fed Chief. While there were debates on the matter, most investors agreed that it was a wise thing for the U.S economy, allowing the chairman to fully restore the economy to healthy economy growth.
The news had an impact on the session sending the indices higher. The financial sector, which has been most affected by the Fed’s efforts, closed up by 1.26%, with Federal National Mortgage and Bank of America leading the way higher. Even though the indices bounced higher at the start of the session, energy weighed on the intraday session, preventing a major rally. The S&P500 finished the session with a 0.24% gain, while the Nasdaq closed up by 0.31%.
Economic data also had a large impact on the session, as U.S consumer confidence jumped to 54.1, beating analyst’s expectations of a 47.9 figure. Furthermore housing data shocked some traders, as the S&P/CS Home Price indices composite showed a better than expected figure, coming out at -15.40%, while the house price index increased by 0.5%. Even though it was lower than last month’s figure, the result came out better than expected.
Further Consolidation for the USD/CAD
On the Forex market, most of the major pairs continued to consolidate during yesterday’s session as the U.S equity market failed to boost any of the pairs. The drag of the day was Crude oil, having a major influence on equities and various Forex pairs.
As stated numerous times on the site, crude oil had recently reached its 200 weekly moving average, a level that was classed as resistance. During yesterday’s session oil hit 75.00, but quickly reversed during the second half of the session dropping by over $3. 
Crude Oil’s weakness along with a mild increase on Wall Street helped to boost the USD/CAD. From a technical point of view the USD/CAD presented a bullish engulfing like candlesstick, bouncing off prior support. Even though this pair could see higher ground in the short term, one must note that major trend line resistance lies ahead. When analyzing this trade more carefully one can see that the potential reward of this trade is currently quite small, which make us think that until stocks present a dramatic move, this pair along with others could continue to consolidate around current levels. Support and resistance levels can be used as possible setup entries.
USD/CAD Daily Chart
Market Data to Watch Out For
Europe will kick off the session, as Germany is scheduled to release its Ifo Business Climate Index. The index which determines the business sentiment and conditions in the Euro-zone is expected to rise to 89.10, compared to its prior result of 87.30. In addition the U.S will release its Durable Goods Orders and New Home Sales. Investors will be focusing on the housing figures to confirm yesterday’s results. As stated above the housing sector has shown a massive turnaround over the last couple of weeks. Recent numbers are even showing that house prices could be finding a bottom.
To view the full economic calendar click here.
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