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Stocks Rally after Irish Tensions Ease

Posted by Futureshound on September 20th, 2010

U.S. stock-index futures are called higher this morning. After a closing price reversal top on Friday, the December E-mini S&P 500 stands poised to challenge last Friday’s high at 1132.75, but first must take out a Fibonacci retracement level at 1128.00.

U.S. equity markets rallied sharply higher on Thursday as tensions eased in the Euro Zone prompting investors to turn up demand for higher risk assets. The strong surge in the June E-mini S&P 500 negated Wednesday’s hard sell-off, triggering a rally through the minor retracement zone at 1074.50 to 1082.25.

The EUR USD is trading higher this morning, but still struggling with a Fibonacci retracement level at 1.2345. Regaining this price will be the key to igniting a surge to the upside.

A combination of optimism in the Euro Zone and dovish commentary from the Federal Reserve is helping to pressure the U.S. Dollar overnight.

U.S. equity markets are called better as tensions have eased regarding Goldman Sachs’ legal problems. Stock traders are also a little more optimistic because of the opening of some air routes in Europe. Technically, all three indices are currently retracing a little more than 50% of the recent decline. This is a key area as the markets are in positions to post secondary lower tops.

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