Currencies are Tumbling, How Low Will They Go?

The major stock indices dropped for the second day in a row yesterday, having a mass affect on the global markets. Already during European hours, global stocks were red, as investors preferred the safe U.S Dollar, to riskier assets. The U.S indices opened in positive territory during the first few minutes of the session, but quickly lost their steam and dropped due to additional profit taking. Economic data also had an impact on the session, increasing the bearish mood.

Even though Initial jobless claims came out better than expected, showing investors that current figures are at comfortable levels, housing data weighed on the session, preventing any form of a rally. The National Association of Realtors reported Thursday morning that existing home sales had dropped 2.7% in August, to a seasonally adjusted 5.1 million, the first decline in five months.

Crude also weighed on the session, dragging the energy sector lower. The black gold dropped tremendously throughout the day, closing down at $65.85. Even though this commodity broke its bullish triangle to the downside, the drop could be limited due to upcoming support levels. In addition according to analysts, crude oil is now in a range, one that the current price justifies the economic situation. According to some, crude oil will stay in a $60-$75 Dollar range, for the following months.

From a technical point of view Crude dropped, breaking trendline support. Even though it did find minor support during the session, its next major support level is located just under $60 per barrel.

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