Overall, the markets made some moves, breaking from the daily channels that have held some of them in place for a few days now. Early in the U.S. session, retail sales came out worse than expected, dropping 0.1 percent over analyst's expectations of a 0.8 percent rise. Weekly unemployment claims also rose higher than expected, to 558 thousand.
The euro (Eur/Usd) sure has gone on a streak today. The pair left its 20 day moving average in the dust after reports showed the Euro zone resumed growth with a 0.1 percent expansion. The pair tested the R2 level before retreating slightly. The 1.4330 area may provide tough resistance for the pair.
The pound (Gbp/Usd) had finally started to move again but found the lure of the 20 day moving average too tempting. Early in the U.S. session the pair made a run for it and broke 90 pips above, only to fall back toward it. The pair is now finding it as a level of resistance while the high of the previous day holds as new intermediate support.
The aussie (Aud/Usd) has been on quite a run the past two days. The pair strengthened by 78 pips or 0.92 percent over the trading day. Currently the pair is finding resistance at the R1 pivot after using it as support briefly. Later, in the Asian session, Governor Stevens will be speaking before the House of Representatives.
The cad (Usd/Cad) has been gravitating around the 20 day moving average for the day. The pair tested the S2 pivot level which coincided with the 61.8 percent Fibonacci retracement of the previous run. Price then bounced off that are and headed right back to the 20 day, currently finding it as support.
The swissy (Usd/Chf) found the 50 day as resistance in the overnight session and has remained below the 20 day moving average which also tied in with the S2 support pivot. The pair tested the S2 pivot before closing the day with a 0.7 percent change.
The yen (Usd/Jpy) has broken down finding resistance at the 100 day moving average while finding strong support at the 200 day moving average. The pairs 20 and 50 day moving averages have provided slight support and resistance throughout the day. The 95.00 area has been a key level of support and resistance in the past.
Markets Advance Despite Poor Reports
Current Futures: Dow +31.00, S&P +7.30, NASDAQ +7.25
Stocks rose slightly on Thursday even as news of worse than expected retails sales and unemployment numbers are released. The retail sector has had marginal declines but was helped by Wal-Mart's better than expected earnings. Financial stocks also edged higher with Bank of American gaining 5.2 percent and the XLF or Financial Sector exchange traded fund rose 2.07 percent.
Retail sales in the United States came in at -0.1 percent, whereas, analysts were anticipating a flat reading of 0.8 percent. This concerns us, stated TheLFB-Forex.com Trade Team Members, it shows that consumers are still cutting back on spending which is opposite of what needs to happen in order to recover from this recession. The report shows that consumers cut back on everything from furniture and electronics to building materials and groceries.
Also released from the Labor Department were the weekly unemployment claims which also rose by 4,000 people to 558 thousand. However there are indications that the largest job cuts may have passed and that job markets may begin to stabilize. The four week average of initial claims has risen to 565 thousand.
The upcoming economic calendar for the Asian session has the Reserve Bank of Australia's Governor Glenn Stevens testifying before the House of Representatives, as well as monetary policy minutes and the tertiary index from Japan.
The Dow Jones Index gained 23.88 points (0.26%) to 9,385.49, while the S&P 500 index added 5.33 points (0.53%) to 1,011.14
Crude oil for August delivery was recently trading at $70.93 per barrel, higher by $0.77.
Gold for August delivery was recently trading higher by $4.80 to $957.30.
Treasuries rose after reports showed that retail sales fell in July, hinting that inflation could still be restrained. The strong demand for 30 year bonds shows that the future is still uncertain about the prospects of economic recovery. Yield on the 10-year note rose 10.5 basis points to 3.71%.