The last trading day before the Easter holiday starts with the U.S. equity indices at the highs. The S&P 500 reached a new all-time high yesterday, unsurprisingly considering the ascending triangle, a technical continuation pattern, that it formed recently.
The move higher in the S&P 500 came in the aftermath of the ADP or private payrolls release. Yesterday, investors found out that the number of jobs created by the private sector in March exceeded 500k, a staggering level. However, the data missed expectations (517k vs. 552k), but the data for the previous month was revised higher. Therefore, all in all, more jobs were added by the private sector in February and March combined, and that boosted optimism and the stock market.
In Europe, the German Dax index trades comfortably above the 15,000 level. It is also a record high, and the bullish bias predominates on all European indices.
The U.S. dollar remains strong, gaining across the board, especially against the Australian dollar. The Aussie dollar dropped overnight from 0.76 to 0.7530 area, on rising EURAUD.
On the commodities front, gold remains well bid above $1,700, and copper holds the key $4,000 level. Today, the OPEC-JMMC meetings start, so investors will keep an eye on the oil market and the effect the price of oil has on the Canadian dollar.
Today is the PMI Manufacturing day in the developed world – Japan, the U.K., the Euro area, and the United States release their data. With only one day left ahead of the NFP in the United States, the focus will be on the ISM Manufacturing and on the employment component. The risk is that the manufacturing sector outperformed again, so the stock market may jump yet again to a new record high.
Markets expect 61.5 from the ISM Manufacturing, but again, the risk is that we will see an even higher number.
Markets to Watch
FTSE, EURUSD, Dax – markets in focus today.
The main U.K. stock market index lags the price action seen in its peers from the United States or mainland Europe. However, the market finds support on the upper edge of a triangle that acts as a continuation pattern and remains bid for a move above 8,000.
The EURUSD pair remains under pressure while below the major bearish trendline seen above. However, it recently found support at 1.17, and the risk here is that it will squeeze higher to the first area of resistance marked in the chart above. A move above 1.1760 should open the gates to further strength until the dynamic resistance given by the falling trendline. Key for the pair is the NFP report tomorrow.
The Dax continues its March higher, and it almost reached the measured move given by the ascending triangle. Bullish traders focus now on the flag pattern’s measured move, which points to 15,500, or another rally of about five hundred points.
Winners and Losers
The U.S. dollar keeps rallying to start the trading month, while the AUD pairs are the weakest so far in the trading day.