Morning Call by Traders University

The FTSE closed up 15 points at 4307, as it continued upwards to break the neckline of the double bottom it formed over the last month. A continuation in this direction with the current short-term buying pressure may cause a test of the 61.8% Fibonacci retracement line at around 4400, and then rally on to the 50% Fibonacci retracement line at around the 4600 mark. In the long term, the primary trend is down and a reversal below this year’s low at 4000, would signal more doom and gloom for the index. The Dow opened the day very sluggishly yesterday traded sideways for most of the session before closing down 9 points at 8270. It broke out of the descending triangle 2 days ago which had be forming for the last few weeks and it continued on the upside and seems to be continuing in that direction heading for another test of 8400. A Breakout above 8400 may go on to test the key level 9000. Today is quite a light day of news releases. At 08:45 the Governor of the Reserve Bank of Australia is due to speak. At 09:30 our Trade Balance is due to be released. The forecast is -£8.1Bn, a slight reduction from last month. If the actual is greater than the forecast then this is good for the Pound. At 14:00 the Governor of the Bank of Canada is due to speak and at 18:00 Ben Bernanke, the Chairman of the US Federal Reserve is due to testify before the Financial Services Committee to testify on the Fed’s efforts to provide liquidity in the current financial crisis. Today is a bank holiday in Japan so please don’t trade the Yen. On Friday 13th we see the start of the latest round of G7 Meetings in Rome, where the Finance Ministers and Central Bankers from the UK, US, Canada, Germany, France, Italy and Japan meet to discuss policy. While the G7 not an institution, it is an influential global policy-making body operating at the highest level, and their initiatives and policies can have a substantial impact on currency markets.