Stock Market and FX Currency Report – August 23, 2013
The pair just managed to close above the critical level of 97.55 on Wednesday that took it back into the bullish zone, after which the greenback gained significantly against the Japanese yen on Thursday where it gained around 95 points all day long.
It bounced back from the pivot point of 97.60 and tested the resistance level at 98.82 and is currently trading at 98.65 in the Asian session on Friday. This yesterday’s move was a very crucial one because it has enticed the bulls to take the pair further up the critical resistance level of 99.06.
Provided the pair breaks and sustains above the 99.06 level then it would get strongly bullish where its next targets could be 99.40 and 100.2.
No. The pair did not go bullish on Thursday. It just gave a mere 38.2% of Fibonacci retracement of its bearish rally that it gave all this week, where it is trading at 0.9006 after gaining nearly 80 points yesterday.
It would remain bearish as long as it does not make a sustainable move above 0.9080 critical resistance level, so selling opportunity remains there for traders. Provided the pair makes a move above the mild resistance level of 0.9032 then it could go on to test 0.9070, breaking of which could show 0.9103 where sellers may start entering again.
However, if bears manage to take the pair below 0.8990 then it could fall to its next support levels of 0.8961 and then show yesterday’s low of 0.8930.
The U.S stock market has been under pressure for the past couple of weeks where it has failed to survive above 1700 level, and remained in range at 1380s area for a long time. However, increased speculation regarding the tapering of the bond buying stimulus package by the Federal Reserve has caused the investors to think of other options where they could invest in and earn significant returns.
Now that the stock market is addicted to the money supply by FED, it does not like the idea of reducing the money supply in the market and due to which the market has fallen sharply in the past few days where the S&P 500 index has tested 1632 area after breaking its 1651 support level.
Followed by the FOMC meeting minutes on Wednesday, the market fell as the FOMC members decided to opt the tapering option later this year as the economy would show much better results by that time. However, yesterday the index re-gained its Wednesday’s gain and gave around 61% bullish correction of its bearish move it gave in the past seven trading days.
Currently the market is at 1654 and sellers would take the tops as a good opportunity to enter the market and go for long-term positions with stop losses being placed just above its all-time high near the 1704 area.