Found Support on it 50 Day Moving Average

After Monday's massive drop, due to fears that the Auto-Industry is heading for bankruptcy, the major U.S stock indices bounced back during yesterday's session, closing with gains of approximately 1.5%. Many analysts classed yesterday’s rally as a “buy-up rally”, something that normally happens towards the last few days of the quarter, in order to show profits on balance sheets.The closely watched financial sector soared compared to the other sectors, increasing by over 5.51%. The sector that weighed on the intraday bullish momentum was the Energy sector, closing the session down by -0.85%.

Economic data didn’t really have much of an impact during yesterday’s stock session, even though the released data continued to show a deteriorating economy. Consumer confidence for the month of March dropped further than expected, showing a result of 26.0, while the S&P/Case Shiller 20-city Composite Home Price Index showed a worse than expected result of 19%, exceeding analysts’ estimate of 18.6%.Tension should increase across the board today as President Obama is scheduled to attend the G20 summit in England. While many topics will be discussed regarding the economy, including further stimulus actions to restore the world’s economy back onto a healthy track, China will also have it say, especially as officials from China are now suggesting that the U.S Dollar should no longer be classed as the world’s reserve currency.

To date the U.S deficit is reaching enormous levels, on GDP terms. Many economies are now questioning whether the U.S will be able to repay its debt. China is especially concerned, as they are currently holding $740 billion worth of government bonds.

Dollar at 50% Fibonacci Trading level

On the Forex market the Dollar index failed to break resistance of 86 points. The recent surge in the Dollar occurred after the index touched major trend line support. From a fundamental point of view, further economic problems have recently surfaced, justifying the recent rally, sending investors rushing back into the Dollar Safe Haven. When observing the following chart one can see that the Dollar is now fighting with its 50% Fibonacci level, a price that could act as minor resistance.

On individual pairs the major mover of the day was the USD/JPY jumping higher, breaking minor trend line resistance. Japan’s Tankan index plummeted in the first quarter, showing investors that the gloomy economy is far from a turnaround. The index came out at -58, exceeding analysts’ expectations of -55. In addition Australia’s Retail Sales sparked movement on the AUD crosses, as the retail sector showed further contraction coming out at -2.00%.

Gold is Converging

After breaking its major trend line, Gold has been presenting lackluster sessions, hanging around the $920 level, when observing the chart carefully one can see that the precious metal is coming close to a break out. With the G20 meeting coming up and important employment data being released towards the end of the week, traders should observe the breakout.

Market Data to Watch Out For

Even though Europe is scheduled to release its unemployment rate later today, major movement will circle around the U.S’s ADP employment survey. The report is expected to show another 660k job losses in the month of March. In addition the ISM Manufacturing Prices are expected to show an increase, while housing data could show signs of further stability. Construction Spending is expected to shrink by only 1.7%, while pending home sales could show an increase of 0.3%