The US equity market could contain Thursday correction and Dow could close at 8574. These interior corrections keep the equities markets rally from a major correction technically until now. The market has seen last Friday that the Jobs market is getting better too but at a slower pace than the gradual pace of the other sectors of the US economy!. The non-farm payroll have lost just 539k in April and wall street was waiting for losing 610k and march lost jobs have been revised up to 699k to bring the total lost jobs to 5.7m since the recession beginning in Dec 2007.

The market has seen that it is another good sign and we may find positive numbers later this year by these weaker paces of contractions in April. We have seen earlier that US April ISM non-Manufacturing index has improved to 43.7 from 40.8 in March and better than the market expectations of 42.5 following April ISM Manufacturing index which came better than expected at 40.1.

Also we have found improving of the consuming performance of this same month as US April US Consumer Confidence index which was expected to go up to 29.5 from 26 in March has come better than expected at 39.2 following the preliminary release of April University of Michigan Confidence index which came better than the market expectations of 58.5 at 61.9 and the final reading came higher recently at 65.1.

The greenback was under strong pressure on this current optimistic market sentiment which droved the equities markets higher again by the end of the week. The single currency could break above 1.344 and closed above 1.36 and the cable also could close above 1.52. These gains have been triggered since the release of the US assessment which came with no new injected funds from the Fed keeping the interest rate unchanged between .25% and zero. The Fed has indicated in its assessment that the economy contraction is in a slower pace which increased the market suggestions that there can be a recovery closer this year and these current prices of the stocks markets can be a chance. The data which we have just mentioned have come all ensuring these believes supporting this widen cheered sentiment.

God willing, this new week is expected to have a strong beginning following the quick recovery of the US equities market which can increase the technical pressure on the greenback. It is important this week to wait for the release of US retail sales which are expected to come positively in April at .2% m/m from -1.2% in March and the figure excluding the auto sales is expected to come positively at .1% from -.9% in March and we wait by the end of this week for the release of US CPI which is expected to shrink yearly in April by another .4% like March and the core figure is also expected to stand as March at 1.8% even the core CPI is expected to be up by just .2% again in April and also we wait on this same day for the release of US Michigan preliminary reading of May which has improved in April to 65.1 as we have aforementioned..  

Best wishes

FX Consultant

Walid Salah El Din
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