Long Awaited Positive News Sets Table For Upward Moves

On July 26, 2012 by TradingDesk

After a choppy, mixed action day Wednesday, most global markets are surging higher this morning following a statement by European Central Bank President “Super” Mario Draghi that officials were ready to act to keep the Euro Zone alive. Details were not given, but it was suggested that buying Spanish and Italian debt, to lower their crippling borrowing costs, is a likely first step. We’ll have to wait and see if this plan works better this time than the last.

The US has also stepped up this morning with 2 bits of good economic news, with weekly unemployment claims dropping sharply (the caveat provided was that tracking this month is skewed by the opening and closing of auto plants switching to new model years) and durable goods orders increasing more during the past month than most forecasts. With technical support having held after Monday & Tuesday’s large selloffs, the Euro surging by the most in a month, and some long awaited positive news for the economic front, the table is set for a significant move up today. The actual performance will say a great deal about the longer term mood of the market.

Energy prices tried to sell off following a bearish DOE report yesterday morning, but bounced sharply into the close and have carried their momentum through the overnight session. With good support now established in the $2.70s for both products, signs point to prices trying to test the upper end of our July range again, targeting $2.95 for both products.

CLICK HERE for a PDF of this morning’s charts

 

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