Vector Securities - Analytics

Vector Securities

374.25 5.25/10
73% of positive reviews
Real

Once again, American statistics disappoint

Once again, American statistics disappoint
At yesterday’s trades dollar bulls couldn’t keep the situation under control and they had to retreat. News background was unfavorable for them. The data on unemployment from the Eurozone stroke the first blow – they were better than predicted. All attempts to regain control failed – production ISM of the U.S.A. fell below 50 points unexpectedly, what adds uncertainty in predicting the Fed’s actions in two weeks. Canadian dollar was unlucky – weak GDP for September stopped all attempts to start correction, following other currencies. Now dollar’s rollback is limited, it is too early to talk about start of strong correction. However, closure of dollar below 100.00 creates preconditions for its development. Today dynamics of the exchange market will fully depend on news background. In the first half of the day one more attempt to develop euro’s correction on the report on inflation for November in the Eurozone. Most such reports on some countries showed that the situation has stabilized and development of deflation processes has stopped. It can cause concerns that the ECB decision will be half and not enough “soft” in terms of stimulation measures widening. Final power of balance will be defined at American session. ADP data on employment in private sector, NY ISM and Beige Book are able to disappoint dollar bulls considerably, especially after weak statistics yesterday. Besides, speeches of Janet Yellen and some other members of FOMC are expected. Against the background of weak statistics and without their support, it will be difficult for dollar to retain positive dynamics. Before the ECB decision dollar can take a defensive position. 
Today Canadian dollar will face one more challenge – the Bank of Canada session on monetary policy. Changes are improbable, the focus will be on accompanying comments on outcomes of the session. Yesterday’s weak GDP creates threats of decrease in rates by the Bank of Canada in the nearest future. If final comments will contain hints of such actions, then Canadian dollar will have chances for renewal of annual minimums. 
 
Trade tactics:
Yesterday’s daily closure of EURUSD pair above 1.0600 creates preconditions for further development of correction. Signals are weak. To aggressive traders we recommend considering pair’s purchase from 1.0590 – 1.0610, stop at 1.490. Initial aim is at 1.0640, further at 1.0690 – 1.0720. In case of a pair growth of more than 30 points from the entry point, rearrange stop at the entry point. 
 
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. 


To leave a comment you must be or register

By visiting our website and services, you agree to the conditions of use of cookies. Learn more I agree