We have seen a continued move to the upside during the Asian Trading session, most asset classes moved higher as a result Charles Evans (Federal Bank Of Chicago President) speech in which he reiterated the fact that the Fed will continue to support the economic recovery in the US.
In the FX market we have seen EUR/USD continuing its strong rally off the back of Thursdays ECB's meeting. The pair broke through the 1.3400 level overnight but at the time of writing we are back at 1.33545 as a direct result of profit taking. With no significant news due out this morning all eyes will be on today's option expiries to dictate the direction on the pair (1.3300,1.3350, 1.3400).
Overnight the USD/JPY reached highs as 89.67 but we have seen the pair retreat back to 89.404 since the opening bell in the European market. If we see a clean break of the 89.00 level the next resistance falls at 92.89.
In the Equity markets we have seen both US Equity Indicies retrace off their highs from the Asian session. $SPX reached a high of 1,475.50 and analysts are targeting 1,500.00 in the coming weeks. The $DOW broke through 13,500 and looks to be targeting 13,600-13,700. The Fiscal Cliff has slipped into the background over the past week, but investors should be weary that we are in Earnings Season and this week will see some of the 'Big Banks' post their earnings, so keep it simple and buy the dips until we encounter any bad news.
Happy Trading
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