Summary
The equity markets consolidated as investors continued to favor stocks over commodities and the dollar. Investors shed commodities as gold and oil prices were hit hard in today’s trading session. Gold prices declined by 24 dollars to settle close to 1160. For the day, the S&P 500 Index declined 1 point to 1113.
Tomorrow's Events
EUR
German CPI
Jul
.3%
.1%
AUD
1:30
Australia CPI
Q2
1%
.9%
USD
12:30
US Durable Goods Orders
June
.4%
NZD
21:00
RBNZ Interest Rate Decision
JPY
23:50
Japan Retail Trade
-2%
Trading Opportunities
GOLD
Gold prices were hammered as investors shed commodity positions in favor of equities. Gold prices, fell 24 dollar per ounce to the lowest levels since late April 2010. Other commodities including oil, copper, silver and gasoline all declined. Gold has not broken through support levels at 1180, as well as, sliced through medium term support at the 100-day moving average. Gold will likely consolidate around the 1160 level, before taking another leg down to support at 1120.
EUR/USD
The Euro continues to look strong despite mixed signals in the market. Sovereign spreads are tightening on improved sentiment, but remain quite elevated and are still pricing in significant default risk for Greece. Overall, despite the continued creep upward in EURIBOR, FX markets are relieved that stress tests, however flawed, have finally been released. The 1.30 level is very important, representing the final 62% retracement level of the big April-June sell off in the euro. Clear break would target the post-ESFS high around 1.31 and then ultimately the April 12 high around 1.37. The recent break of the 100-day moving average is a robust technical sign for the EUR/USD.