{"id":3912,"date":"2009-09-21T07:47:06","date_gmt":"2009-09-21T12:47:06","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=3912"},"modified":"2009-09-21T07:47:06","modified_gmt":"2009-09-21T12:47:06","slug":"etoro-weekly-market-review-sep-21-09","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2009\/09\/21\/etoro-weekly-market-review-sep-21-09\/","title":{"rendered":"eToro Weekly Market Review sep 21, 09"},"content":{"rendered":"
\"\"<\/a><\/div>\n

 <\/p>\n

The Dollar Continues to Slide Against Counterparts<\/strong><\/p>\n

Last week was characterized by additional Dollar selling as the greenback continued to drop on improving economic data and reassurance from government officials that the U.S economy is now on the right track, back to a recovery.\u00a0 US industrial production rose a stronger than expected 0.8% m\/m in August, while the July gain was revised up to 1.0% m\/m from 0.5%.<\/p>\n

President Obama took the stage numerous times during the week, stating that job losses are bottoming out and that the new impositions, tariffs, will not spark a trade war between the U.S and China. According to Bloomberg news, President Barack Obama stated that he is now very optimistic about the U.S getting a set of rules in place that will prevent another similar crisis to what the U.S economy has experienced over the past two years. Even though he did mention that the U.S economy is far from out of the woods, his overall tone was optimistic regarding the economic future. In addition Fed Chairman Ben Bernanke stepped up to the plate, mentioning that the current recession has \u2018very likely\u2019 ended.<\/p>\n

The leader of the week was the euro climbing to new highs vs. the dollar. Even though there was little follow-through, the nature of the trend was a slow grind higher for the euro. The EUR\/USD tested highs seen in December of 2008, and has now reached major resistance of $ 1.50.\u00a0 When taking a look at the chart below one can see that the week was characterized by another leg higher, one that has now brought the EUR\/USD into its early 2008\u2019s range.<\/p>\n

\"\"<\/a><\/p>\n

Renewed concerns about the UK banking sector acted as a catalyst to drive the British pound below important support of $1.6400. During Friday\u2019s session a telegraph revealed that Lloyds\u2019 banking group failed the FSA stress test and will have to remain under the government\u2019s asset protection program for a while longer. Furthermore the regulator decided that the bank will require an extra \u00a328bn to withstand bad debts.\u00a0 The GBP\/USD crashed during Friday\u2019s session but seemed to hold its 100 day moving average which it is sure to re-test at the beginning of this week.\u00a0 One must note that even though the GBP has shown relative weakness compared to other currency pairs against the Dollar, support of 1.6231 could prevent a major landslide.<\/p>\n

\"\"<\/a><\/p>\n

The euro\u2019s cross of its 20 day moving average also extended its gains against the pound last week, after breaking above the 50% retracement of this year\u2019s falls.\u00a0 The EUR\/GBP broke above a weekly trend line, one which inspired bullish traders to take this pair higher. Due to a much higher return from the Euro-zone and further problems in the U.K, some which are expected to weigh on the Bank of England and prevent them from attempting to exit its quantitative easing program anytime soon, investors preferred to take the EUR\/GBP higher for the week, reaching target resistance of \u00a30.9<\/p>\n

\"\"<\/a><\/p>\n

*courtesy of netdania.com<\/p>\n

U.S data continues to prevail<\/strong><\/p>\n

During the week the US released inspiring economic data, which included the aforementioned industrial production as well as Retail Sales, and the Philadelphia Federal Reserve survey.\u00a0\u00a0\u00a0 Retail sales jumped in August by the largest amount in more than three years, spurred by widespread gains beyond the expected increases of auto sales from the government\u2019s Cash for Clunkers program.\u00a0\u00a0\u00a0 The Commerce Department said Tuesday that retail sales rose a seasonally adjusted 2.7 percent last month, after falling 0.2 percent in July. It was the largest gain in three-and-a-half years and beat analysts\u2019 expectations of a 2 percent increase.<\/p>\n

The Philly Fed Survey, a broad measure of manufacturing conditions, increased from \u20107.5 in July to 4.2 this month. The percentage of firms reporting increases in activity (27%) was slightly higher than the percentage reporting decreases (23%). Other broad indicators also suggested improvement. The current new orders index edged six points higher, from \u20102.2 to 4.2, also its highest reading since November 2007. The current shipments index increased 10 points, to a slightly positive reading.<\/p>\n

The positive data sparked renewed buying during the week on the equity markets, as the major indices continued to climb during the week. The S&P 500 touched new highs for 2009, closing the week higher by 25.5 points or 2.45%. From a weekly perspective, the S&P 500 continues to move away from its head and shoulder breakout pattern and now seems like it is heading for its 200 weekly moving average, located at 1250 points. Despite that fact, one must note that the daily chart is showing signs of being overbought. Current price levels could lead to a pull back before the next leg higher.<\/p>\n

S&P500 – Daily Chart<\/p>\n

\"\"<\/a><\/p>\n

This week\u2019s data:<\/strong><\/p>\n

Even though the economic calendar is relatively light on data next week the U.S should continue to lead the markets, due to an upcoming interest rate decision. Even though a no change status is expected by most traders, growing speculation that the Fed could raise rates in months to come are weighing on the investors. While the decision itself should pass with no major affect on the price movement, many will be observing the statement that is expected to be released shortly after. Furthermore when taking a glance at yields, one can see that the curve is now pricing in future rate hikes.<\/p>\n

In addition to the awaited rate decision, the U.S will release its leading indicators, durable goods, existing and new home sales. The housing data will be closely scrutinized by investors especially as recent data has shown a dramatic improvement, compared to previous months. According to the National Association of Home Builders, confidence edged up again in September, despite an ease in single family starts.<\/p>\n

Market Analysis provided by eToro<\/span><\/a><\/strong><\/p>\n

Disclaimer: Trading in the Foreign Exchange market might carry potential rewards, but also potential risks. You must be aware of the risks and are willing to accept them in order to trade in the foreign exchange market. Don\u2019t trade with money you can\u2019t afford to lose.<\/p>\n

\u00a9 2009 eToro Blog.<\/a><\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By eToro – In addition to the awaited rate decision, the U.S will release its leading indicators, durable goods, existing and new home sales…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-3912","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3912","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=3912"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/3912\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=3912"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=3912"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=3912"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}