The beginning of the week was quite calm. Under the lack of strong drivers European currencies traded in narrow ranges. The data on German industrial production were weaker than expected, what put some pressure on the common currency in the first half of the day, though it weakened at American session. Yesterday trade currencies showed themselves worst, they got under pressure of fall in energy prices. The market is slowly recovering after two hard days, which closed previous week.
Today there are few notable events. It is practically only the data on GDP for the 3rd quarter in the Eurozone and industrial production in the U.K. At this stage European GDP is rarely changed, as a rule. In this situation market reaction will be close to zero, activity splash is possible in case of discrepancies with forecasts to any direction. Today British statistics are important for pound on the threshold of the Bank of England session on monetary policy. They can influence the process of discussion on regulator’s plans for future. Accordingly, under conditions of today’s weak informational background players will use opportunity to regain these data, especially in the case of discrepancies with forecasts to any direction. Even after sharp rollback from minimums last week, the trend remains descending, there is no confirmation of reversal, and there are doubts as to choice of further movement direction before the end of the year. So, market reaction to the report will be based on the fact. Besides, we will pay attention to the data on housing market in Canada. Sharp fall in energy prices after OPEC session puts strong pressure on Canadian dollar, which renewed annual minimums against dollar, in contrast to other currency pairs. Weak statistics will become a driver for continuing sales.
As we have recommended in our overview, we opened long position in EURUSD pair from 1.0805, stop is at break-even point. Still, pair’s ability to return above 1.0900 raises doubts at this moment. Market activity has sharply decreased, consolidation goes on. We are unsure that the market won’t remember existing trend and whether we can keep this position. So, we recommend to leave purchases with profit as long as it is possible, and continue looking for new points to enter the market.
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.