An optimism buying wave in the equity market has been triggered by the Treasury new plans for buying more toxic assets to spur investing in partnership with the private sector could contain the current market sentiment in the beginning of this week pushing Dow above the major resistance at 7555 again rising by 6.9% yesterday and it is now trading above it at 7690 weighing on the gold which declined to 917 earlier in the session and it is trading now at 924.
The plan suppose that there can be an investors appeal for buying this toxic assets sharing the government the risk in stead of a full taken risk by the government by nationalizing these bigger than falling banks to clean their sheet to lend again and continue its activities again but the value of these toxic assets are not the same as before the crisis and the cost can be higher than the government is expecting as the pricing will by the market not by the banks and the request for them can be very weak at the current recession pressure. The treasury admits the risk of this plan and declared that there are no other allowed options currently.
The market is expected to face a profit taken wave which can support the greenback again today.
The British pound has had a boost today from the better than expected release of the UK retail sales which increased by .6% m/m from a decline by 1.3% in Feb and the market was waiting for a decline monthly by .1% and from other side the pound has been underpinned by a higher than expected inflation pressure in Feb as UK CPI of Feb came .9%m/m and the market was waiting for just .3% and the core to be .2% monthly but it has increased by .6%. These data made the British pound not the favorable currency to be sold versus the greenback today. The cable next support is 1.465 and in the case of holding at this support, the cable can try for the major resistance at 1.5.