Dow Closes Above 13,000
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Dow Closes Above 13,000

Port Louis : Mauritius | Feb 29, 2012 at 5:15 AM PST
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EURUSD, AUDUSD and S&P 500 All Rally to Meaningful Resistance

Federal Reserve Chairman Ben Bernanke will speak today in front of U.S. Congress. While the Fed has pledged to keep interest rates low until late 2014, markets will be watching Mr. Bernanke to see if his views conflict with the announcement. Several Fed policy makers have commented that the Fed might change its mind on the 2014 date. We are also expecting the preliminary estimate of the fourth quarter GDP. Estimates suggest that the U.S. economy expanded 2.8% in the last quarter of 2011. The Durable Goods order report came below market expectations as orders fell 4% in January. Excluding defense orders, durable goods orders fell 4.5%. This was the biggest drop in Durable Goods orders in the last three years. The drop in orders was attributed to an expiration of tax break for businesses. Consumer confidence on the other hand reached a twelve month high with the consumer confidence index rising to 70.8 from 61.5. The Dow closed above the 13,000 level for the first time since 2008. The breakthrough in the Dow was attributed to fall in Oil prices and the surging consumer confidence number. Support for the USA30 is seen at 12,750 and resistance is seen at 13,100.The EURUSD rallied 80 pips higher on yesterday’s trading in anticipation of the LTRO auction. This is the second long term refinancing operation (LTRO) to be carried out by the European Central Bank. Markets are waiting for the size of today’s auction to be announced. Initial estimates suggest that European banks are expected to borrow around 500 billion Euros. In December a total of 489 billion Euros was loaned out to Euro zone banks at a refinance rate of 1%. We expect markets to be disappointed if the total amount loaned out is less than the previous amount. More money borrowed from the ECB translates to better peripheral debt performance. Risk sentiment will be bolstered if the auction is deemed successful. The first auction held in December was credited for preventing a credit freeze and flooding the markets with liquidity. More than 500 banks took advantage of the three year loans announced by the ECB President Mario Draghi in December. Support for the EURUSD is seen at 1.3200 and resistance is seen at 1.3500. The Inside View indicator on HotForex shows that 65% of traders are short on the EURUSD.Australia reported that retail sales grew 0.3% in January. Retail sales sector has struggled in recent times with a 0.1% drop in growth in December. Economists predict that the retailers will continue to struggle as they face increased competition from online retailers. Retail sales in 2011 were the weakest recorded since 1984. The AUDUSD broke its range and traded above 1.0800 despite the lackluster report. Support for the AUDUSD is seen at 1.0650 and resistance is seen at 1.0850. The Inside View indicator on HotForex shows that 51% of traders are short on the AUDUSD.HotForex Category 1 Global Business No. C110008214 License. HF Markets Ltd." trading as "HotForex.com" is a tax resident in Mauritius.Trading in Forex Exchange and CFD's involves risks that may not be suitable for anyone. Independent advice should be sought if necessary. HotForex Ltd

+44-2033185978

info@hotforex.com

www.hotforex.com

hotforex is based in Larnaca, Government controlled area, Cyprus, and is a Reporter on Allvoices.
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