Daily Market Review 29th March 2012

Daily Market Review

29th March 2012

Fundamental News

Today’s highlights:

• Initial Jobless Claims + GDP (QoQ) (U.S, 12:30 GMT)
• Fed Chairman Bernanke Speaks (U.S, 16:45 GMT)
• German Unemployment Rate (EUR, 07:55 GMT)

Orders for U.S. manufactured durable goods rebounded in February after showing a notable drop in January.   Durable goods orders rose by 2.2 percent in February following a revised 3.6 percent decrease in January, according to a report released by the Commerce Department on Wednesday.

China has approved $24 billion in long-term foreign debt quotas to six overseas banks in a bid to attract more capital inflows to the country, the National Development and Reform Commission (NDRC) said in a statement on Thursday.

Germany's EU harmonized inflation slowed in March, after rising in the previous month, preliminary data released by the Federal Statistical Office showed Wednesday. The harmonized index of consumer prices (HICP) increased 2.3 percent on an annual basis in March.

Economic contraction in the U.K. during the fourth quarter was worse than estimated initially, revised data released by the Office for National Statistics showed Wednesday. Gross domestic product fell 0.3 percent from the third quarter, compared to the previously estimated 0.2 percent decline. Moreover, U.K current account deficit dropped to GBP 8.5 billion in the fourth quarter from a revised GBP 10.5 billion deficit in the third quarter.

EUR/USD: The euro traded lower against the U.S. dollar on Wednesday, after the release of the U.S. durable goods orders. Today, the EUR/USD was trading at 1.33332 at the time of writing and the pair is likely to increase to test the resistance level of 1.33842, following the news that European governments are preparing for a one-year increase in the ceiling on rescue aid to 940 billion euros ($1.3 trillion) to keep the debt crisis at bay, according to a draft statement written for finance ministers, which has just been published by Bloomberg news. Speculations and market sentiments in Europe and U.S will surely affect the movement of the pair and we also have some fundamental data, which will be released later during the day and might have an impact on the pair. Fundamental news that investors should follow are; the German unemployment rate, the Italian 10-Year BTP Auction, the U.S Initial Jobless Claims, the U.S, GDP figures, and also the Fed Chairman Bernanke Speech. Prudence is recommended. The support level is at 1.32763.

GBP/USD: The pound extended losses against the U.S. dollar on Wednesday, after the release of U.S durable goods orders while earlier U.K. GDP data continued to reduce demand for GBP. The GBP/USD was trading higher in Asia at 1.59173 at the time of writing and the pair is likely to suffer from profit taking intra trade as market sentiments remain weak on the GBP following the release of some poor economic data since the beginning of the week. However, Investors should stay focus and pay particular attention to fundamental news, which will be released in the U.S later today and the UK M4 Money Supply for the month of February, Mortgage Approvals, Consumer Credit, Index of Services and Net Lending to Individuals are also due for today. These fundamental news will give more visibility on the pair. The resistance level is at 1.59553 and the support level is at 1.58394. Market sentiments will continue to drive the markets. Investors should be cautious.

GOLD: The price of gold was up in Asian trading on Thursday, as investors snapped up positions in the yellow metal after it plunged after the release of durable goods orders in the U.S.  The metal was trading at $1661.77 an ounce at the time of writing and price of gold is likely to fluctuate within the resistance level of $1678.38 and the support level of $1646.53 ahead of the U.S gross domestic product figures and initial jobless claims numbers as well as Fed Chairman Bernanke Speech later today. Investors should closely monitor the trend of the USD, as gold often trade inversely to the USD. A wait and see approach recommended.

DOW: U.S. stocks ended Wednesday’s session lower on weaker than expected durable goods orders and slumping energy shares due to falling oil prices. The DOW locked near the level of 13060points yesterday. However, the index was up today in Asia and was trading at 13065.7 points at the time of writing. The Dow is likely to fluctuate within the resistance level of 13148 and the support level of 13001.8 as investors are waiting for the U.S. GDP and initial jobless claims as well as German unemployment change, which will be released later today. Investors should wait for the fundamental data to release so as to get more visibility on the index and take a position accordingly.

Good Luck in trading….