Financial markets daily

In the currency market

EUR: The euro gained for a second day in a row against the dollar, closing 0.21% higher at 1.2117. Technically, EUR/USD is long-term bullish, with room for further rally, but needs to clear resistance at 1.2170/80. Since mid-January, the 23.6% retracement of the November/January rally has come under selling pressure. Technical indicators continue to lack directional strength, but remain at positive levels.

GBP: GBP gained for a second day in a row against the dollar, closing 0.25% higher at 1.4009. Technically, GBP/USD continues to climb in the general uptrend, but is close to overbought and the relative strength index near 70 on the daily chart could signal a more meaningful downside correction. However, the upside momentum remained strong, with the pair trading above the 50-day, 100-day and 200-day simple moving averages. All in all, if the currency continues to creep higher, the bulls may be in the ascendancy.

JPY: The dollar fell for a third straight day to 105.43 yen, down 0.24%. Technically, technical factors turn to support USD/JPY. The RSI peaked in overbought territory on Tuesday and Wednesday, indicating a modest reversal in the second half of the week. However, the rebound from the 200-dma support of 105.50 suggests this is likely to be the third temporary pullback since the trend change in early January. The support and resistance lines are balanced, but the 21, 100, and 200 dma reinforce the rebound bias after any decline.

The stock market

LONDON (MarketWatch) – European stock markets closed higher on Friday, as investors reacted to a fresh batch of corporate earnings and economic data, as well as U.S. Treasury Secretary Janet Yellen’s call for fiscal stimulus. The pan-European Stoxx 600 index closed up 2.18 points, or 0.53%, at 414.88. Basic resources stocks led the way, up 3 per cent. Germany’s DAX30 index closed up 106.30 points, or 0.77%, at 13,993.23. Britain’s FTSE 100 index closed up 6.87 points, or 0.10%, at 6,624.02. France’s CAC-40 index closed up 45.22 points, or 0.79%, at 5,773.55. The Euro Stoxx 50 index ended up 32.81 points, or 0.89 percent, at 3,713.85. Spain’s IBEX35 index closed up 92.90 points, or 1.15 percent, at 8151.00. Italy’s FTSE MIB index closed up 214.48 points, or 0.94 per cent, at 23,136.31.

U.S. Treasury Secretary Janet Yellen said that while the economy is recovering more quickly than expected, massive stimulus measures are still necessary, with a $1.9 trillion stimulus package likely to help the United States return to full employment within a year. The market focus on the bailout came as Nancy Pelosi, the speaker of the House of Representatives, said she hoped to pass the House’s version of the $1.9tn rescue package before the end of next week. All three major indexes were higher for most of the morning, but a rise in U.S. bond rates and profit-taking in technology stocks damped optimism in the afternoon. At the close, the Dow was up 1.00 points, or 0.01%, at 31494.32, after rising more than 150 points earlier in the day. The S&P 500 fell 7.20 points, or 0.18 percent, to 3,906.74. The Nasdaq closed up 9.10 points, or 0.07 percent, at 13,874.46. The Dow has had a better week, edging up 0.11%, while the S&P 500 is down 0.71% and the Nasdaq is down 1.57%.

Commodity markets

Spot gold settled at $1,784.10 an ounce, up $8.58, or 0.48 percent, from a low of $1,760.52 and a high of $1,791.56. Spot gold fell $39.98, or 2.19 percent, this week.

COMEX gold futures for April delivery ended up 0.1 percent at $1,777.40 an ounce, down about 2.5 percent on the week.

U.S. WTI crude for March delivery ended down $1.28, or 2.11 percent, at $59.24 a barrel. Brent crude for April delivery ended down $1.02, or 1.59 percent, at $62.91 a barrel. This week, the United States oil accumulatively closed down 0.38 percent, cloth oil accumulatively closed up 0.77 percent.

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