Friday April 16, 2010 - 19:58:36 GMT
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Forex Hound - www.forexhound.com
Stock Indices in Position to Finish Week Lower
News that the SEC filed
fraud charges against Goldman Sachs helped send equity markets sharply
lower early this morning. The announcement hit the market as stocks
were treading water after better than expected earnings in Google
failed to fuel a rally and General Electric earnings disappointed
The weaker indices are now in a position to post a
weekly closing price reversal top which could trigger the start of a 2
to 3 week correction. Although the initial reaction was to the downside
on the news, traders still arenâ€™t sure if this represents a potentially
long-term development or if this is just an aberration.
flight to quality rally following the sharp drop in stocks is helping
to fuel a rally in the June Treasury Bonds and June Treasury Notes.
Yields fell as investors flocked into these two Treasury markets. The
main trend turned up on the daily chart when the T-Bonds crossed 116â€™22.
Gold broke sharply after the U.S. Dollar rallied. The drop in equity
markets fueled a decline in demand for higher yielding assets sending
gold sharply lower. The daily chart indicates that a break to $1128.40
is likely over the near-term.
The stronger Dollar is also
triggering a liquidating break in June Crude Oil. At the mid-session,
this market is poised to change the trend to down on a break through
the last swing bottom at 83.75. This could trigger a further decline
into a retracement zone at 83.43 to 82.45.
The U.S. Dollar was
trading higher at the mid-session as traders sold higher risk assets
after the SEC filed fraud charges against Goldman Sachs. The hardest
hit market was the U.S. equities which dropped 1.50 to 2.00% following
the announcement. The news triggered a massive liquidation in
speculative commodities and equities, affecting almost all Forex
The June Euro, which was already trading lower at the
time the bearish news hit the market, broke sharply while filling in
the gap created on April 11th. This market is finding some support at a
50% retracement level at 1.3486. A failure to hold this level could
mean an acceleration down to 1.3438.
The June British Pound is
under pressure after breaking an uptrending Gann angle at 1.5437 and a
.618 retracement level at 1.5419. The daily chart indicates this market
is likely to test a 50% level at 1.5160 on April 20th.
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