Watching the marketï¿½ï¿½s behavior these days is like watching an Australian soap opera. Emotion has been running high and investors are trading according to the good, bad and ugly circumstances. The stocks were trading higher into European session and finished positive, as better than expected news came out of Germany and therefore traderï¿½ï¿½s feelings were once again positive about the recovery. However, come New York session and so far DOW JONES is trading lower, amid worse than expected housing data.
The EUR/USD looks better today, after surging ZEW numbers, gave the euro bulls an incentive to buy the currency and break the important 1.3530. So far the pair has found a temporary top at 1.3660 which worked as good resistance, however if it holds 1.35 for now, further upside may be seen towards 1.37-1.3750 in the coming days.
The economic calendar had a few important releases out of UK and EU, with CPI coming much lower and the Bank of England been put on the spot once again. The fears for deflation are real these days and King with his pals need to convince the government that they actually have a plan about the economic recovery and not make things up as they go along - which is how it feels for all of us. Also we had a better ZEW number out of Germany which gave Europeans some kind of hope that the worse is over, however notice how the better number was for ZEW sentiment, which actually means the way businesses ï¿½ï¿½feelï¿½ï¿½ about the economy. As I mentioned previously, itï¿½ï¿½s all about feelings, after the November and December market lows and dismal economic data, traders are getting ready to leave that behind and opt for a substantial market recovery. However, every day there is always something that stops them, be it pessimism or realism that the economic crisis is not over by far.
In other markets, we saw oil pairing up gains, right after the worse than expected economic data out of US, however it feels like speculators are back and wish to see the commodity rising further above $65 in the coming weeks. The market participants are searching for proof that the global economy is improving and therefore demand for oil will be once again top priority.
Letï¿½ï¿½s see how markets end up closing today and if DOW JONES will feel the worst of recent indications the US housing sector is underperforming. It is very interesting to see how US and world officials are trying their best to fix the current negative economic sentiment, with optimistic speeches and smiles, nevertheless, beware of false prophets, as if their optimistic estimations are proven to be wrong, the market will make them pay with another collapse.