Friday March 5, 2010 - 20:23:45 GMT
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Forex Hound - www.forexhound.com
Stocks Soar; Better Jobs Report Drives Up Demand for Higher Risk
U.S. equity markets are
trading sharply higher following the release of better than expected
U.S. Non-Farm Payrolls Report. Investors are driving up stock prices on
the belief that the jobs data indicates an improving economy.
Technically, the daily swing chart indicates a possible move in the
March E-mini S&P 500 to 1156.00 by March 12th.
Bonds fell after the better than expected jobs reports signaled that
the economy was improving, bringing the Fed closer to hiking interest
rates. Based on the short-term range of 114â€™15 to 118â€™02, traders
should look for weakness to drive this market down to the next major
retracement level at 116â€™04 to 115â€™24.
April Gold is trading
slightly better. The muted reaction to the weaker Dollar indicates that
it may have already been priced into the market. A close over $1137.80
will be bullish, but a failure to regain this price could drive the
market back to $1117.20.
June Crude Oil is trading better.
Todayâ€™s jobs data indicates that the economy is improving. This could
mean greater demand for higher yielding assets. The primary reason for
todayâ€™s rally is most likely greater demand for more risky assets.
U.S. Dollar is trading lower against most major currencies after
better-than-expected jobs data drove investors into higher yielding
assets. The initial move in the Dollar was up after the U.S. Non-Farm
Payrolls Report showed fewer jobs were lost than estimated. Traders
bought the Dollar on the belief that the better jobs number would move
the Fed closer to hiking interest rates. Higher interest rates would
make U.S. investments relatively more attractive. This move was
short-lived however as investor demand for higher yielding assets
overcame the desire to hold Dollars.
The March Euro is trading
better at the mid-session. Relief that the Greek budget deficit crisis
may be easing is helping to drive out weaker shorts. Earlier in the
week, the main trend turned up on the daily chart, but this market
needs to move through 1.3735 in order to reaffirm this change in trend.
The March British Pound is trading near the high of the day at
the mid-session. Upside momentum seems to be building which could take
this market to a 50% level at 1.5297 over the near-term. The current
rally appears to be driven by short-covering and bottom-picking
following a sharp sell-off earlier in the week. The driving forces
behind the recent sell-off have been the weak economy, soft monetary
policy and political uncertainty.
The March Japanese Yen is
trading sharply lower. The improving U.S. economy and demand for higher
risk assets is putting pressure on the Japanese Yen as it resumes its
role as a funding currency. Traders are also reacting to the
possibility that the Bank of Japan will announce more stimuli at its
upcoming policy meeting. Todayâ€™s break completed the first objective of
yesterdayâ€™s closing price reversal top when it reached a .618 price
level at 1.1041.
The strengthening Euro is helping to support the
March Swiss Franc. Traders are expressing relief that a higher Euro
will encourage the Swiss National Bank from any further interventions.
The main upside objective remains a major 50% level at .9526.
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