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  • DAILY FUNDAMENTAL ANALYSIS: TEST OF RANGES TODAY 0 comments
    Sep 6, 2010 8:18 AM | about stocks: GOLD, USD

     USD, EUR, GBP, JPY, AUD

    The week will start on a quiet note because of the Labor Day holiday in the States. Before going into the weekend mixed data surrounded investors once again and gave both bulls and bears more reasons to foster a debate. While the Non Farm Employment Change numbers were better than expected, the ISM Non Manufacturing PMI was disappointing. Also making some news was the U.K’s negative Services PMI report and lackluster Retail Sales figures from Europe. Today will be very light with data. The U.K. will publish its BRC Retail Sales Monitor and the Bank of Japan will begin to hold its monthly monetary policy meetings.

    Trading today is likely to see very light volume with most of it consisting in the early Asian and European sessions. The markets in the States will be shuttered until Tuesday. Tomorrow will continue to be a relatively light day of releases with the German Factory Orders statistics and possibly the Halifax HPI coming from the U.K. – although it may come on Wednesday due to its tentative schedule.

    Traders may find some opportunity to take advantage of light volumes today and test ranges that make themselves known as certain ‘players’ try to challenge the quiet markets. Wall Street did gain on Friday as risk appetite was put back on the table due to the better outcome in the jobless numbers. However, the final statistics still showed that overall - jobs were lost and the private sector while hiring is still not doing so in any type of massive fashion that will suddenly turnaround American consumer confidence. It will be an extremely slow week from the U.S. regarding data with only the weekly Unemployment Claims on Thursday capable of bringing real impetus.

    Until then the broad global markets are likely to trade based on existing sentiment, which essentially leave traders and investors debating the merits of optimism versus a pessimistic approach. The JPY continues to be an interesting currency to watch as it hovers nears its highs and has been provided little encouragement to vacate its range. The AUD is trading near the higher part of its range, but it is doing so under a cloud which still exists politically and has not shown the capability of being resolved easily. Perhaps by now, traders have grown accustomed to the political tug of war and are beginning to take positions based on their long term feelings regarding the Australian economy which looks relatively strong compared to other counterparts.

    The USD did trade weaker against the EUR going into the weekend, but the greenback managed to stay its ground against the GBP. Data from all three spheres, the States, the U.K., and Europe remain unimpressive and the struggles that meet them economically will continue to bring about rather cautious trading. Short term moves, particularly without major releases on schedule, could be a reason for traders to attempt to test risk sentiment and prevailing ranges today and tomorrow.

    Stocks: GOLD, USD
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