U.S. GDP Higher, but Misses Estimate; Overbought Conditions May Pressure Euro
U.S. Stocks Finish Lower Under Thin Conditions Ahead of GDP Report
U.S. stock markets closed lower under thin trading conditions as most major market participants took the day off ahead of tomorrow’s 2Q GDP report. This left the market wide open for day-traders and scalpers who created a little volatility early before eventually settling down after the mid-session.
Overbought Conditions Could Trigger Weaker Stock Market Opening.
If overnight trading action is any indication then look for U.S. equity markets to open lower. The lack of buying interest overnight is most likely a reflection of short-term overbought trading conditions and the lack of fresh economic news. The Dollar is still under pressure against the Euro and British Pound, but equity traders are a little disconnected from this move this morning.
Oversold conditions and the lack of fresh bearish news helped the Euro turn around and close higher for the day. Fundamentally, nothing happened to change the minds of traders. Investors are still concerned that the European Union is not doing enough to fix the financial problems in the Euro Zone.
U.S. Dollar finishes lower under tight trading conditions
The U.S. Dollar finished lower against all major currencies as trader demand for risk helped to pressure the Greenback. The weakness in the Dollar was attributed to optimism in the Euro Zone over the potential positive impact of the new European Union and International Monetary Fund bailout proposal for Greece.
Overbought Conditions Likely to Support Stock Indices Today
U.S. equity markets are showing small gains overnight as traders begin lightening up positions ahead of this Friday’s Non-Farm Payrolls Report. Economic reports may take a backseat throughout this week as traders try to determine how the employment picture has changed during the month.
Oversold Technical Conditions Boost U.S. Dollar Overnight
The U.S. Dollar is trading higher overnight based on oversold technical conditions. Yesterday’s comments from Fed Chairman Bernanke regarding the Dollar may also be triggering a short-covering rally as well a position-lightening. The overnight action has not been sufficient enough to call for a change in trend.