Once again, the U.S. equity indexes are moving upwards, with the JUN13 E-mini S&P 500 futures contract trading up to a new 2013 high this morning. Our next level we are looking at for potential resistance is the 1575 level. However, the market seems to be in a big bull phase right now, so to us any targets to the upside are not necessarily major reversal points, more so potential congestion areas for the market to stop and breathe. The market’s volatility is at recent lows, so the market could just keep grinding upwards. We believe the 1600 level will be hit this year.
The Nikkei hit a big level at 12,500 with the yen continuing to depreciate against the U.S. dollar. The Nikkei has actually pulled back a bit this morning, and is now trading at 12,380. Like the yen, but moving in the opposite direction, the Nikkei has been a one-way train as of late, rallying huge with the yen moving down. We still believe the yen can fall further, thus we believe the Nikkei can rise more. We believe the major first target for the Nikkei index is 13,000.
In commodities news, precious metals are very quiet today, but corn is starting to show some life again, trading up 1.36% to $7.13 (MAY13 contract). To us, there seems to be a potential congestion area between $7.20 and $7.25, and potential support right below $7.10.
We focus more on the New Zealand dollar today. Recently, the U.S. dollar has rallied against several foreign currencies, including the pound, yen, Aussie dollar, Canadian dollar, and New Zealand dollar. Overall, we believe the U.S. dollar still has room to run and many of its foreign currency counterparts have room to fall further, but we might be seeing a short term consolidation or even retracement now. Our first key resistance level for the NZD is .83 and then .8325. Our first major support level, which has not quite been touched yet, is it .8175. For the short term, this market could range trade between these levels. As U.S. stock market volatility is historically very low, the currency markets could potentially not make wild moves in the short term, but anything is possible.
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