U.S. equity markets are
trading higher, but the rally appears to be slowing due to the lack of
fresh buyers. Strong overnight support led to a higher opening this
morning, but the rally has stalled. Traders seem to be waiting for a
catalyst to take the markets to the next level. The lack of fresh
economic news may be partially to blame for the slow down in the trade.
The other reason is uncertainty over whether a resolution will be
reached between the European Union and Greece.
Bonds are trading lower in light trading. Higher equity markets are
providing some of the downside pressure. After testing a key 50%
resistance level at 117â€™23, this market seems poised to correct back to
116â€™04 over the short-run. Volume could be light because of this weekâ€™s
U.S. Non-Farm Payrolls Report.
The threat of a break in the
Dollar is helping to boost April Gold at the mid-session. This
morningâ€™s rally tested a major 50% price at $1136.75. A close over this
level will be a sign of strength and could trigger a further rally to
$1158.50. The recent weakness in the British Pound and Euro has put
gold at an all-time high in terms of these two currencies. This is a
sign that traders have been diverting investment funds into gold as a
hedge against currency market instability.
The weaker Dollar and
the possibility of a rally in the Euro are helping to support June
Crude Oil today. Tuesday upside surge has this market in a position to
breakout over the recent main top at 81.51.
The U.S. Dollar is
trading mixed against most majors as traders try to decide whether it
has reached the end of the rally, This morningâ€™s surge to the upside in
the March Dollar Index fell short of the recent main top at 81.43
before turning lower. This is an indication that the selling may be
greater than the buying at current levels. The formation of a secondary
lower top will also be a strong sign that this market is getting ready
to rollover to the downside.
After touching a new low for the
year overnight, the March Euro turned around as the lack of fresh
selling pressure scared some of the weaker shorts out of the market. At
the midsession, the Euro is trading higher which puts it in a position
to form a closing price reversal bottom. Bullish traders are banking on
a resolution of the Greek fiscal crisis to trigger a huge
The March British Pound is trading lower
but inside of Mondayâ€™s range. The trend is still down and the
fundamentals bearish, but traders have stopped the downside pressure as
they reassess the developing political situation in the U.K. A recent
poll shows that the Minority may gain control of the Parliament for the
first time since 1974. Investors fear that political gridlock will
prevent the country from digging out of its mountains of debt.
a stronger stock market today, the March Japanese Yen is trading firm
but inside its three-day range. This could be position squaring ahead
of Fridayâ€™s U.S. Non-Farm Payrolls report or it could mean that
investors are anticipating a turnaround to the downside in the equity
markets. The charts indicate support is building around at major 50%
level at 1.1227. A further strengthening will trigger a test of the
.618 level at 1.1356.
The March Swiss Franc is finding support
because of the strengthening Euro. Investors have been buying the Swiss
Franc as they have become more relaxed about the possibility of another
round of intervention by the Swiss National Bank.