Volatility was the theme of the day, due to the early data of US GDP with only 0.2% growth against 1.0% expected. But who estimate that frame of reference to compare? Why the market reacts if a number is worse or better than expected? It really makes no sense, and as long as we focus on those parameters which are sometimes very illogical, we will continue with that kind of volatility in economic data, or surely just estimate that simply because algorithms have a framework to react immediately to win something in back river.
Stock indices worldwide fell obviously, if you say it should be 1% and 0.2% out all fires down. The funny thing is that the European indices were the most suffered losses after the event, but if we think Europe exists thanks to the US economy right now. Look only unemployment rates in the countries of the European Union and compare them with the Stock Market, It makes no sense, while USA has some jobless recovery and the market are keeping up. So a contraction of the United States, could end up sinking the European economy.
Then came the minutes of the FOMC that brought more volatility to the market, but did not have any clarity as expected and by the time we have the technical analysis.
Although the Dow ended with losses, significant levels are maintained and we continue within the wave "A" of the last ABC we expect to complete the ending diagonal in the daily chart. By the end of the month, the index should continue upward to look for 18180 - 18234 area which is 100% and 123.6% Fibonacci extensions. There should complete the wave "A" then see another correction but should not lose the 18000 level and then make the final push upward to a minimum of 18357 and then wait if we have a strong downward reaction.
To invalidate this idea the market must do two things: or break down the level of 17550 and the beginning of the wave 4 is confirmed or break up the 18500 level such that has no return.
_20150430070746.png "US30 - Primary - Apr-29 1525 PM (2 hour)")
_20150430070815.png "US30 - Diario - Apr-24 1414 PM (1 day)")
Stock indices worldwide fell obviously, if you say it should be 1% and 0.2% out all fires down. The funny thing is that the European indices were the most suffered losses after the event, but if we think Europe exists thanks to the US economy right now. Look only unemployment rates in the countries of the European Union and compare them with the Stock Market, It makes no sense, while USA has some jobless recovery and the market are keeping up. So a contraction of the United States, could end up sinking the European economy.
Then came the minutes of the FOMC that brought more volatility to the market, but did not have any clarity as expected and by the time we have the technical analysis.
Although the Dow ended with losses, significant levels are maintained and we continue within the wave "A" of the last ABC we expect to complete the ending diagonal in the daily chart. By the end of the month, the index should continue upward to look for 18180 - 18234 area which is 100% and 123.6% Fibonacci extensions. There should complete the wave "A" then see another correction but should not lose the 18000 level and then make the final push upward to a minimum of 18357 and then wait if we have a strong downward reaction.
To invalidate this idea the market must do two things: or break down the level of 17550 and the beginning of the wave 4 is confirmed or break up the 18500 level such that has no return.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD struggles to find direction, holds near 1.2550
GBP/USD stays under modest bearish pressure and trades near 1.2550 on Tuesday. The neutral risk mood, as reflected by the mixed action seen in US stocks, doesn't allow the pair to make a decisive move in either direction. The Bank of England will announce policy decisions on Thursday.
Gold rebounds to $2,320 as US yields edge lower
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.