Last week, Wall Street ended mixed tendencies to close slightly higher after President Obama delivered his plan for reducing the deficit by $4 trillion over 12 years, and as the Federal Reserve’s beige book. It seems that the economy remains on stable footing. The U.S. economy continued to improve over the past month on gains in manufacturing, but firms are feeling the effects of higher energy and raw material costs. President Obama’s plan for reducing the deficit will surely provide stability to US financial market, thus raising confidence in the battered greenback.
Crude-oil futures dipped in Asian trading on Monday, despite the world’s largest oil exporter, Saudi Arabia, saying it had cut output on the belief the market is oversupplied. Benchmark light, sweet crude slipped 73 cents or 0.7%, to $108.82 early Monday in electronic trading on the New York Mercantile Exchange. On Sunday, Saudi Arabia’s oil minister reportedly said the nation cut its oil output by around 800,000 barrels a day in March, due to oversupply. Concerns eased about violence in presidential elections in Nigeria, a major oil exporter, with CNN reporting the vote was “largely peaceful.” All these signs suggest oil is bound to head lower. Look for a breakout of support to enter the market.
Gold futures climbed Friday to close at a record $1,486 an ounce, up 0.8% for the week, with silver hitting its highest level in over three decades, as inflation concerns buoyed investment demand for the precious metals. Silver prices have rallied almost 38% year to date. They marked a gain of 4.8% for the week after closing last Friday at $40.61. We view upside inflation risks as more likely than positive growth shocks in the U.S. This should mean that when the Federal Reserve eventually tightens monetary policy, it will not derail the rally in precious metals. Needless to say, we are extremely bullish on metals.
Today’s Important Economic Announcements (GMT)
8:30 AM CAD Foreign Securities Purchases
10:30 AM USD FOMC Member Fisher Speaks
12:30PM USD FOMC Member Fisher Speaks
9:30 PM AUD Monetary Policy Meeting Minutes
Financial markets moved to minor exchange rate drops over the past few trading days as did the German index that is correcting some of the impressive upward movement it made just a week ago. Investor’s sentiments are still positive and so, the estimate is that the index will return to its upward trend the moment it completes the shuffling movement which it entered a few days ago. The DAX’s horizontal movement has created an interesting pattern that is now on the point of an upwards breakthrough. The closure of the 4 hour candle above the trigger level at 7200 will confirm the renewal of the northern movement and towards a resistance level and my exit target of around 7445.
Stop Loss: 7242
Take Profit: 7163
The U.S. Dollar was higher against the Swiss Franc on Monday. The Swiss Franc was trading at 0.8938, up 0.15% at time of writing. The pair was likely to find support at 0.8896, Thursday’s low, and resistance at 0.9000, Wednesday’s high. Only break above this level could bring price back to 0.9200 level. We expect the pair to continue heading north, as it begins to recover from the extensive downtrend which has been evident in the past few weeks. We advice our traders to be on the lookout for any major breakout of the 0.9000 level, where it would be wise to buy the USD against the CHF.
Stop Loss: 0.8900
Take Profit: 0.9000
The continued surge in commodity prices underpinned the Australian dollar. The AUD/USD was lower against the U.S. Dollar on Monday. The pair is trading at 1.0548, down 0.20% at time of writing. The Aussie is likely to find support at 1.0429, Wednesday’s low, and resistance at 1.0579, Friday’s high. The AUD/USD continues to set new highs as it broke the former top at 1.0435. We should continue seeing small technical corrections as it continues to create new highs. A break above the 1.0582 would target the 1.0695 level. All pullbacks should be considered buying opportunities.
Stop Loss: 1.0512
Take Profit: 1.0579
Published by www.SolidityBrokers.com