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American statistics improve, what is favorable for dollar

American statistics improve, what is favorable for dollar
Yesterday euro tried to change the situation in its favor on expectations of publication of PMI indices in the Eurozone, but this attempt failed. These indicators showed quite good results, exceeding forecasts, but the market used “sell the news” principle again. However, American statistics confirmed correctness of such behavior. Durable goods orders were contradictory – the basic component showed growth, which was close to forecasts, still, overall index was weak due to transport component and evaluation for previous month was revised downward. Houses sales in the primary market showed great results – growth of more than 2 % in comparison with previous month, herewith the evaluation for previous month was revised upward for more than 3 %. The support of American statistics provoked dollar’s strengthening against most currencies and it creates preconditions for its further growth in the short term. 
Today we will again see a tug-of-war between American data and data from the Eurozone. First, IFO report on moods in business environment in Germany will be published. Forecasts are slightly worse than in previous month, but publication of higher figures is possible as it happened with PMI indicators yesterday. The influence on dynamics of euro rate will be limited. Suddenly the market cooled down to European statistics and shifted them to the periphery. Once again, the focus will be on American statistics, to be more precisely, on final evaluation of GDP for the 1st quarter. It seems that American statistics will see series of positive. The forecast promises improvement of final GDP, though it is difficult to expect exit from the minus. Nevertheless, last economic reports from the U.S.A. show that the second quarter can be considerable better than the first one. It occurs that Fed’s forecasts of speed-up of US economy in the 2nd quarter have grounds, what returns the topic of start of monetary policy tightening in this year and rates of this tightening in the forefront. 
 
Trade tactics:
Our yesterday’s attempt to buy euro failed, though we succeeded to avoid losses – long position from 1.1245, opened in the morning, was closed on stop without loss. The closure of the day below 1.1200 indicates that it is necessary to change the tactic. Technical indicators in EURUSD pair reversed downward and short-term prospects of the pair worsened greatly. For today we consider sale of EURUSD pair from 1.1190 – 1.1210, stop at 1.1290, aim at 1.1080 – 1.1110.
 
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. 


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