Yesterday the common currency easily regained Friday’s losses, pulling the rest of the market with itself. Characteristically, euro was confidently growing without sharp fluctuations all day long, in contrast to expressive growth of dollar on Friday. German statistics set the tone by its positive – export showed good growth and industrial production increased above forecasts. Still, it wouldn’t be enough for such sharp change of moods in the market. Strange as it may seem, G7 summit gave the main support to euro. Nothing special was said, but short remarks of European leaders implied a desire to find a mutually acceptable solution of Greek issue. US president also supported the view that Greece should stay within the Eurozone. It will be difficult for dollar to find arguments in own favor till publication of the data on retail sales.
Today news background is quite calm. Speaking of noticeable events in the Eurozone, there is only the second evaluation of GDP for the 1st quarter. In the light of yesterday’s events, any positive related to European theme will only speed euro upward. The more so since, there is no significant news from dollar today. What concerns local events, the report on foreign trade of the U.K. can be noticeable, but only for pound. Still, it is able to provoke just short-term activity. Taking into account chronicle deficit of trade balance and the fact that investors practically ignore it, pound’s reaction can be in any direction.
The range 1.1400 – 1.1500 is again looming on the horizon of EURUSD pair, herewith it can appear to be an interim aim. Rapid change of the situation doesn’t allow to find a point for entry into the market. Due to high volatility risks have increased and stops are to be set too far from the entry point to escape from regular change of moods. We presume that in the middle term euro’s purchase is more profitable, we do not recommend to open short positions at this moment. Now the pair is slightly overbought and purchases aren’t profitable at current levels above 1.1300. We stay observers.
Any opinions, advice, news, research, analyses, prices or any other information presented on this webpage is provided as general market commentary and does not constitute investment advice. "Vector Securities" shall not be liable for any loss, including loss of profit, which may arise directly or indirectly from the use of this information.