Another up-trending day on Thursday, but it is now in a very overbought territory, and may be ready for a pullback. However, being in overbought territory does not imply immediate pullback, as it can continue to trend higher and higher.
The key level for Friday is 2560
- Above 2560 implies it is still in an up-trending mode, with the next upside target at 2575-2580.
- A sustained break below 2560 implies it is going into a consolidation/pullback mode targeting a drop down to 2545 then 2535.
From Associated Press:
European central banks to blast cash into economy
FRANKFURT, Germany -- With Europe sliding toward recession, the region's two main central banks are preparing to redouble their emergency measures aimed at softening the downturn and blunting the effects of the government debt crisis.
Analysts expect the U.K.'s central bank, the Bank of England, to announce Thursday that it will inject another 50 billion pounds ($79 billion) of new money into an economy that shrank at the end of last year.
Meeting the same day at its headquarters in Frankfurt, Germany, the European Central Bank is expected to trumpet the advantages of its second unlimited offering of cheap, three-year loans to be allotted to banks on Feb. 29.
Neither central bank is expected to change interest rates from their current record lows -- the Bank of England at 0.5 percent and the ECB at 1.0 percent. Rather, attention will focus on their outlooks and their attempts to push more money into the banking systems and the economy.
A first blast of cheap ECB credit -- euro489 billion ($641.23 billion)-- was taken up by 523 banks on Dec. 23. The step has been credited with calming some of the market panic from the debt crisis hitting the 17 countries that use the euro, and stocks and government bonds have risen since then. Analysts think the takeup could equal or exceed the first one, since the ECB has loosened collateral requirements.
