The forex market was taking its direction clues from the equities markets changes in the recent 2 days. The greenback has been under a pressure with the equities markets appreciation in the US session after increased worries about the confidence in the US treasuries specially after the Russian president announcement of cutting its holding of the USD back securities missing looking for other options can save the Russian economy after the credit crisis which proved to him the weakness of basing on the greenback. These repeated Russian announcements are have the ears of the Chinese sometimes who are holding the biggest market share of the US debit which put this issue at the top of Timothy Geithner agenda of his visit to the Chinese who can not find other options yet can compensate the greenback as they always announce in these events. When these market worries contain the market sentiment, they can put a selling pressure on the greenback and the US treasuries which were the first US Treasury and Fed's quantitive easing steps by offering an exchange of the mortgages back securities which became known as toxic assets with US treasuries which can poison the US creditability itself and they are still the Fed's preferred way to pump funds and easing by its adopted quantitive easing policy after losing the cutting interest rate tool to afford the required liquidity for the government to clean the banks balances sheets and to spur growth moving in its rescue financial plans for a promising recovery can start later this year and store the confidence in the US economy again to cover its debits worries.
The Dow future could reach a new year high during the Recent US session at 8877 but it headed to the red territory by the session end to close up by just 31 points. The US retails sales of May have come up by .5% broadly and they were expected to be up by.4% and the core figure excluding the auto sales have come up by .5% and the market was waiting for just .2%. the consuming data were not significant enough to make a change while the market focusing was on the US treasuries auction results. By God's Will, we wait today for the preliminary reading of University of Michigan consuming sentiment survey of June which is expected to increase to 69.9 from 68.7 in May and further positive data can underpin the market prospects of a demand can move this struggling growth up and add further confidence in the stocks holding.
The single currency could come above 1.41 amid these equities markets gains 1.41. The single currency has opened the week under a technical pressure from last week closing below 1.4 amid S&P downgrading of The Irish economy to negative on the credit crisis consequences. The single currency could make a bottom in the beginning of the week versus the greenback at 1.38 while it was trading by the US labor data last Friday at 1.42 before joining the gains of the equities market directly after the release o the labor data which pushed the Dow future for the first time this year to this same level it has opened at today at 8834 before giving back the lead to the greenback again.
The British pound has joined the single currency the same performance versus the greenback and it is still relatively underpinned by the release of April industrial production of UK which increased by .3% after March declining by .6% and the market was waiting for a another declining by .1%and the UK manufacturing productions which increased by .2% in April from a fall by .1% in March and the market was waiting for a flat reading in April. The British pound has suffered recently from the political concerns around the Labor party future but it could bottom out at 1.58 in the beginning of this week but it has faced an intermediate resistance at 1.6435 level as it was the lower high which has been made on the 4th this month of after its peak of the year which has been made last week at 1.666 and we are facing again right now after breaking 1.6435.
The gold after finding support last week at 960$, it could not be sustained above 980$ after the labor data and it has fallen below 960$ which forms a resistance right now. The gold has suffered a technical pressure on last week closing below this level which lead to further declining to 942.8$ on the beginning of this week before joining the currencies advances versus the greenback yesterday and it is trading right now at 955$ after failing to break 960$ in the US session. Recently, The gold has found the support which pushed it above 980$ from these same worries which we have aforementioned earlier about the US treasuries and the probabilities of increasing interest rate to add attractiveness to it which can erode the Fed efforts to stimulate growth amid the current increases of the commodities and energy prices which come accompanied with the rises of the market confidence in this gradual recovery and these worries come back to the market focusing again in the US session pushing the US 10 years treasuries yield up to 4% before getting down after yesterday auction which found buying of the 30 years US more than widely expected amid rising of the oil prices well above 70$ a barrel right now and this can give the gold support to come back again above 960$ to have further technical support.