Stocks snapped a three-day losing streak as weekly jobless claims unexpectedly fell to the lowest since July.

The measure came in at 359K versus 385K registered last week, and better than the 375K that was expected.

The data was enough to outweigh a slew of other disappointing economic data with Q2 GDP unexpectedly falling to 1.3% versus the previous estimate of 1.7%.

Durable goods orders fell by more than anticipated, tumbling 13.2% after last month’s 3.3% gain.

While the shortfall was led by a significant drop in transportation orders – Boeing reported sales of just one airplane in August – non-transportation components contracted for the third consecutive month, coming in at -1.6%. Finally, pending home sales dropped 2.6%, reversing last month’s gain, and short of an expected gain of 0.3%.

Investors are mistakenly upbeat this morning as hopes are that QE3 will encourage continued improvement in the labor market. With more Americans working, consumption is due for a rebound as well, which in turn will support further growth in GDP.

Chinese authorities are mulling further monetary easing are supporting markets as well. Consequently, the dollar remains supported within its recent ranges, albeit towards the lower end against its higher-yielding counterparts.

- The USD/JPY is has traded in an extremely consolidated 19-pip range today (77.58 intraday minimum, 77.77 intraday maximum), on the heels of a plethora of economic indicators out of the United States earlier. After a string of overall poor data in the US, Japan gets its turn to highlight its economic fortitude to investors, starting at 23:13 GMT later tonight.

In these moments the cross is operating at a -0.12% loss on the day, placing the pair in the region of 77.65. The technical analyst team at has identified the next supportive structures at 77.60, 77.30, and finally 77.00. As investors eye tonight’s data release in Japan, the analysts determine the resistive measures at 78.00, then 78.20, and ultimately 78.50.

The euro rallied against the US dollar, with the positive news from the Spanish government boosting risk appetite. At the time this report was written, the EURUSD pair had risen to $1.2893.

AUD/USD peaked at 1.0448 before losing steam and it is currently trading at the 1.0440 area, recording a 0.7% gain on the day.

The Australian dollar has been underpinned by stocks and gold rally and by speculation about additional stimulus in China after the PBoC injected a record amount of liquidity into the banking system this week.

As for technical levels, above 1.0450, next resistances could be found at 1.0470 and 1.0500, while supports are seen at 1.0400, 1.0360 and 1.0325.

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Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

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