AWARDS

During the early trading session, Asian stocks traded mixed as investors digest the government bond sell off from major central banks, as yields reached its highest levels since November. The Nikkei share average closed almost flat with a 0.03% increase, the Hang Seng Index was down 1.12% and the Shanghai Composite rallied 3.67% led by gains in the electricity, utilities and retailers sectors. Following the release of positive data from Australia the AUD traded higher against a basket of major currencies. The Home Loans for the month of March rose 1.6%, above the expected figure of 1%, this positive data indicates higher demand in the housing market.

During the European session, the British Pound continued to climb higher against the Dollar following strong UK data and the pair is currently trading at its highest level since December. The Manufacturing Production for the month of March showed that the inflation adjusted value of output produced rose 0.4%, higher than the forecast figure of 0.3%. The EUR/USD also traded higher as higher yields along with the global bond selloff pushed up the Euro. Furthermore, Greece paid a loan installment of 750 million Euros to the Monetary Fund lifting fears that the country could go into default, however, the nation is yet to lay out reforms and reach an agreement for an extension on the current debt bailout.

During early U.S. trade, American stocks traded lower as borrowing costs across global banks reached its highest levels since late last year. Nasdaq Composite is down 0.44%, S&P500 down 0.38% and Dow Industrial dropped 0.31%

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Once you understand the concept of a trend, the next major concept is that of support and resistance. You'll often hear technical analysts talk about the ongoing battle between the bulls and the bears, or the struggle between buyers (demand) and sellers (supply). This is revealed by the prices a security seldom moves above (resistance) or below (support).

Why Does it Happen?

These support and resistance levels are seen as important in terms of market psychology and supply and demand. Support and resistance levels are the levels at which a lot of traders are willing to buy the stock (in the case of a support) or sell it (in the case of resistance). When these trendlines are broken, the supply and demand and the psychology behind the stock's movements is thought to have shifted, in which case new levels of support and resistance will likely be established.

Round Numbers and Support and Resistance

One type of universal support and resistance that tends to be seen across a large number of securities is round numbers. Round numbers like 10, 20, 35, 50, 100 and 1,000 tend be important in support and resistance levels because they often represent the major psychological turning points at which many traders will make buy or sell decisions.

Buyers will often purchase large amounts of stock once the price starts to fall toward a major round number such as $50, which makes it more difficult for shares to fall below the level. On the other hand, sellers start to sell off a stock as it moves toward a round number peak, making it difficult to move past this upper level as well. It is the increased buying and selling pressure at these levels that makes them important points of support and resistance and, in many cases, major psychological points as well. 

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What is it? Governor Wheeler is due to hold a press conference about the Financial Stability Report, in Wellington.

As head of the central bank, which controls short term interest rates, he has more influence over the nation's currency value than any other person. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.

When? May 12^th at 5:05pm Eastern Time.

Trading Tip: If the announcement will hint towards higher interest rates, you can expect the NZD to rise.

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