GDP Surprises Currency Pairs Show Signs of Break-Outs

The Dow Industrial Average completed one of its best Julys, since 1939, increasing by 8.5%, while the S&P500 climbed to finish the month with a 7.3% gain. Bullish momentum was already experienced at the start of the week, as Monday’s U.S open showed that investors were still confident about the current rally and were not discouraged by any lagging sectors. Even though momentum decreased during the week, consolidation was only a temporary thing, as investors drove the major indices even higher, prior to the release of the GDP result. Caterpillar stood out among the major moving stocks last week, finishing up 20% for the week and 33% for the month. One must note that Caterpillar was closely observed last week as this large cap is thought to represent the strength of the industrial sector. Caterpillar reported better than expected earnings, shooting higher above its 50 day moving average, to closes the week above $44. To date this large cap is now trading below major resistance, whereas a break could help drive the Dow to higher levels, further improving confidence in the markets.

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