Minor Movement on Forex Pairs, Financials Pull down Stocks

Toyota also had an effect on the intraday session. Even though the news wasn’t a major market mover, the stock dropped as Toyota said it is recalling about 437,000 Prius and other hybrid cars worldwide to fix brake problems.

Financials were the lager of the day, forcing the indices down to major technical support levels. The S&P500 finished the day with a loss of -0.89%, while the Nasdaq closed with a -0.70% loss. From a technical point of view the major S&P500 presented a reversal candle on Friday, but failed to provide a confirmation candle. Even though the trend is clearly a downtrend, the indices are in need of a bounce – one that could occur around upcoming support.

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Alcoa disappoints, GBP/USD at Critical Point

The major stock indices traded in negative territory throughout most of the session but managed to bounce back, towards the closing bell. Taking a glance at the chart below, one can see that even though yesterday was characterized by selling pressure throughout the session, the trend has not yet been broken, as prior resistance continues to hold as support.




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Low Volume at the Start of the Week, Mortgage Stocks Surge

The U.S stock market started the week on a positive note, ending the session with mild gains. Even though the intraday session was characterized by choppy trading, the indices received a boost towards the end of the session, backed by individual stocks from the housing sector.

Positive sentiment already came during morning hours, as China stated that its growth could reach 10% by next year. China, known for its massive surplus, expanded throughout 2009, by a whopping 8.5%, as various stimulus measures helped to boost the economy. Chinese Premier Wen Jiabao said yesterday the national economy had improved and was back on track to reach the growth target during 2010. Furthermore, he mentioned that policy makers do not intend to change the management of the Yuan.

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A Lack of Economic Data Sent the Indices Higher, USD/CAD returns to test its break-out

The shortened week started off on a positive note, as Asian indices climbed higher. Positive sentiment quickly spread to Europe and the U.S, sending all the major indices to higher levels. One must note that the Nasdaq closed the session at a new high at 1828.79, after breaking through strong resistance.



The economic calendar lacked market-moving data yesterday, therefore traders turned to previous price action, continuing Friday’s trend. Even though the indices bounced at the start of the session, they presented a lackluster session, consolidating up until the close.

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A wave of Data Led to Further Consolidation

Inflation data was scrutinized by investors ahead of the rate decision to see if there would be any changes to the wording of the FOMC statement due to the numbers. The Federal Reserve Statement displayed little change from prior statements and alerted that market that monetary easing would continue for a substantial period of time. These comments were expected by market participants and the reaction was already baked into the market’s price.
Employment data also grabbed market participant’s attention as Thursday’s first-time jobless claims rose by 7,000 to 480,000, defying expectations of Wall Street’s economists that the number would drop. The less volatile four-week average of new claims, however, fell by 5,250 to 467,500, maintaining a healthier trajectory.



The week ended with the Bank of Japan's policy meeting. The board voted unanimously to leave its policy rate unchanged at 0.1%, as it studies the effects of a measure announced earlier this month to try to lift demand. One must note that the BOJ offered up to 10 trillion yen ($111.2 billion) in short-term funds to the market. The policy board also said in a statement that it decided to "further disseminate" the BOJ's thinking on price stability, and made it clear that the board won't tolerate on-year falls in the consumer price index.

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Dollar Bulls are Still in Control, USD/CAD and AUD/USD now in the Spot Light

The U.S stock market inched higher yesterday, closing with an average gain of 0.2%, after the Fed released its important interest rate decision. While some were expecting a more hawkish statement, market participants managed to read between the lines, understanding that the Fed is now acknowledging the recent economic rebound. Even though the Fed stated that they intend to maintain a low rate policy, the bank touched recent developments in the job market and financial markets, mentioning minor improvement.

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Consolidation on the Forex Market, Stocks Creep Higher

After climbing at the start of the session, the U.S stock market remained in range up until the closing bell. Economic data was the major culprit yesterday, as data from the U.S showed a mixed picture.

Similar to last week’s increase Initial jobless claims jumped more than expected to 474.00k. The Georgia department said that 72,298 laid-off workers filed initial claims for state unemployment insurance benefits in November, a 2.4% increase from October. Even though the news wasn’t inspiring, it didn’t have much of an effect on the intraday session as the U.S Trade Balance Index showed a slight improvement of -32.90B, compared to a previous-35.70B figure. According to the data, October’s exports were $3.5 billion more than September’s exports, while imports increased just $0.7 billion.

From a technical point of view the major indices continued to trade in range, led higher by consumer Discretionary and Utilities.



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