By: Bastian Rubben
The bearish atmosphere took over Wall Street last week on the background of disappointing Non-farm payroll change. The investors decided to look on the dark side and ignored the improving unemployment rate and the fact that 80% of the big 500 companies reported better than expected results for the first quarter. On the technical aspect, things looks better for the US indices and if you analyze the weekly chars you will see that the S&P 500 did not make any significant change during the last 4 weeks. In fact, it has been moving between 1360 and 1400 points and it might continue stamping between these levels before it chooses direction. At this point, it looks like it is likely to continue down, as a strong break-down might pull the index to 1330-1320 points.
The declines in Wall Street had the obvious affect on the major currencies that weakened against the USD. The disappointing NFP should have weakened the USD as well, but since Europe is dealing with worst crisis, the investors preferred the American dollar. I analyzed the pair EUR/USD last week and mentioned that it was moving through a channel, which was likely to break-down due to stochastic high levels. The Euro acted as I estimated and the bearish movement started on Thursday after the ECB press conference, and it is now moving to the psychological support at 1.30. Additional break-down there might cause sharper declines and take the Euro down to 1.285.