Wednesday, August 24, 2011

Daily Technical Analysis - August 24, 2011

Yesterday, the US stock markets have closed on green territory, while all the indices have been rising; these rises may be attributed to public's faith in the banks and to the "fear dimension" that went down 14%, under 40 points. We will remind that during the last four weeks, the stock market has altogether lost about 16%. Next Friday, the Fed Chairman Bernanke will pronounce a speech in Jackson Hole, Wyoming, and the investors will be bracing for the third quantity easing through the acquisition of bonds as he did last year.  in the macro scene, the Homes Sale Index has decreased in 0.7% in July to K298 in yearly pace, while economists had expected an increase to K313. The bad news coming from Europe do not stop as a sharp decline was shown in the German economy in the security index, contrarily to the economic forecasts that were of  -24.8, and ended at -37.6.

The summary of the indices in USA:

The Dow Jones has gained 2,97% at 11,176.76, and the S&P has shown a rise of 3.43% to reach  1,162.35; the largest rise was accomplished by NASDAQ at 2,446.06 with a positive change of 4.29%.


It seems that since the beginning of June, the EURO has been trying, almost daily, to lead the US Dollar to the price level of 1.46 and even to 1.47; but, despite the last debt crisis, it seems that the dollar manages to halt this tendency. Due to a lack of data from the American economy during the course of the week, the investors wait with much expectation to the speech of the Fed Chairman Bernanke, hoping for a governmental action and for economic incentivisation as a reaction to the downgrade of the gold rank a little less than two weeks ago and, of course, to the deepening debt crisis. Today will be published significant data regarding the strength of German economy, data that might clearly affect the EURO. In case the data will show an increase, the first resistance point will be at 1.4515, the daily high of last Wednesday (which may be seen on the 4h graph). A break-up of this level, and maybe a false break-up, may be halted in a point that is not too far from there, at 1.4536, the daily high in July 27 2001. However, the 4H graph shows a lack of energy that could lead up the parity to the above-mentioned levels. In case this pair weakens, the first support might be at 1.4365, the moving averages 50 and 20 in the 4H graph. The breakthrough of this level might lead this pair to the next level at 1.4325, the daily low established last Wednesday.


As we expected, it seems that the intervention of the Japanese government in the currency at the beginning of the month has not succeeded to hold on for a long time due to the tsunami crisis when the International Monetary Fund assisted Japan through the strengthening of the currency. In case that, in the course of the day, and maybe towards the weekend, Bernanke presents encouraging news in his speech, we might see the pair getting close again to the level of 75.90 and the Japanese might act again against the strengthening of the Yen.
 However, if the Dollar manages to take off during the day, the first resistance will be at 77.14 as we may see in the 4H graph, an average of 100 and the highest daily created the day before yesterday.


As we have mentioned yesterday in our review, the Gold has began correcting just as we have described. A possible correction point may be in the prices range of 1,810$/oz; in the 4H graph, we may see the average 50 and the daily high which was on Thursday two weeks ago. The breakthrough of this level might lead us to the psychological resistance point of 1,800$/oz. Since the investors consider commodities to be alternative investments and even as a safe shore in times of crisis, we will expect the strengthening of the commodities to go on and whoever manages to create the tune will probably be Bernanke in Jackson Hole next Friday.