The U.S stock market had a rough day yesterday as traders failed decide which way to take the indices. As mentioned on yesterday’s video briefing the S&P500 (broader market index) is now stuck between trend line resistance and 50 day moving average support. In a mixed session, the major indices failed to present any major movement, hovering around their open. Most investors were waiting for the major event of the day, one that was scheduled to be released after the closing bell.

Alcoa kicked off earning season yesterday showing investors that despite the 2 year downfall the large cap, like other companies, is now slowly finding its feet. The stock jumped by 2.23% after the aluminum giant reported a surprise third quarter profit, ending three straight quarters of losses. The giants income of $77 million, 8 cents a share and topped analysts’ expectations.

From a technical point of view Alcoa climbed higher after touching its 50 day moving average at the end of last week. Even though this pair is forming higher lows and higher highs, a break above its recent higher will depend on the overall movement of the broader market.

Alcoa Daily Chart


 

Australia shows the World What it’s Made of

On the Forex market the Dollar continued to lose strength against its counterparts. The Dollar index, a measurement calculated against six major currencies, dropped throughout the session due to an enormous increase in Gold. In addition, thoughts that the worst could be behind us, put pressure on the Greenback, sending it lower during yesterday’s session.

After failing to present strength the Dollar index dropped at the beginning of the week and is now testing its prior low. One must note that despite the current trend, the index is now trading on major support, one that was formed in September last year.


 
Australia surprised the markets yet again yesterday, showing that their employment situation is far better than expected. Australia’s unemployment rate showed a dropped for the first time in nearly half a year as employment soared. This good news was following the banks sudden rate decision to hike their central rate to 3.25% from 3% earlier during the week.

The number of people hired jumped by 40.60k, compared to an expected figure of -10.00k. Their unemployment rate dropped to 5.7%, coming out far less than analysts’ expectations and lower than Augusts’ result of 5.8%.

Yet again the AUD/USD showed strength compared to other currency pairs, continuing within its current trend. As stated yesterday, the AUD/USD is now approaching its upper trend line resistance which should be taken into consideration.

Market Data to Watch Out For

A wave of data will hit the boards today, but all eyes will focus on two interest rate decisions. Even though surprises can occur in the market, investors are currently pricing in a no-change outcome from both the banks; the ECB and the BOE. At the last monetary policy meeting the BOE failed to show signs of further stimulus but also didn’t mention exit strategies. The ECB on the other hand could be the one to surprise the markets, but with Trichet’s recent comments on the importance of the U.S Dollar, these two rate decision could turn out to be only minor events.

To view the full economic calendar click here.