The S&P futures ended yesterday’s session in the red after losses in the EUR/USD dragged on U.S. equities. Rumors circulated that China’s SAFE was reviewing its exposure to EU assets. However, government officials denied these reports today and the FX risk trade has made an impressive recovery in response. Meanwhile, Geithner is visiting Germany in an effort to forge an image of solidarity as investor confidence wanes. Attention is still focused on the EU with a key parliamentary vote taking place in Spain regarding a proposed austerity plan . Analysts are expected a tight vote and if the austerity plan is rejected this couple place renewed downward pressure on the Euro. On other hand, if parliament backs the package then this could inject a bit of much needed confidence in the risk trade. Attention will shift back to the U.S. later today with the release of prelim GDP and weekly unemployment claims on tap. Another set of solid U.S. data could help buoy the S&P futures as they consider a retest of their key psychological 1100 level. Although yesterday’s DGO data printed mixed, new home sales posted an encouraging rise as U.S. citizens take advantage of the last month for America’s housing incentives. Today’s GDP figure is the final key data release on tap for the week, meaning psychological forces should regain control of the markets once investor reaction to the release dissipates. That being said, investors should keep a close watch on the EU new wire and activity in the Euro over the next 24-48 hours. Meanwhile, the S&P futures must deal with their key 1100 level, which could prove to be a key near-term battleground.
Price: 1087 Resistances: 1089.79, 1093.36, 1097.48, 1100, 1107.05, 1111.71 Supports: 1076.59, 1070.81, 1068.14, 1061.92, 1057.47, 1051.69 Psychological: 1050, 1100, 1000
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