Vector Securities - Analytics

Vector Securities

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Today trades are to be interesting in the exchange market


Yesterday PMI in service sphere were generally good (they were revised upward) as well as retail sales. American data were mixed (ISM of service sphere was slightly better, weekly applications for unemployment benefits were worse, production orders didn’t reach forecasts). It was enough to break nerves of dollar bulls on the threshold of US labor report and start partial profit fixation, dollar’s index lost its ground at 98.00. Besides, the head of Dallas Fed spoke for longer pause in question of increase in rates. Herewith, we’d like to note that published American statistics can’t be called weak and it makes being cautious about dollar’s sales.
Considering this day, only one thing can be said – the official report on labor market will be published today. The event, which traditionally has strong influence on market’s dynamics, and unpredictable as usual. Analysts are quite cautious in estimating coming report – consensus forecast on new work places is below 200K. It can become a new reality for a long period. For last year, investors have been accustomed to high rates of creating work places, so they have to adapt now. For dollar, the positive fact is that other indicators have started giving signs of economic revival. If the economy continues to recover further, then decline in rates of work places growth won’t have negative influence on dollar in future. Today it requires figures above 200K, otherwise dollar can pass its positions in the short term. 
 
Trade tactics:
We stayed observers, finding no points for opening long positions on euro in previous day. The closure of EURUSD pair above 1.0900 implies renewal of local maximums today. Technical picture is contradictory – the pair has carefully approached next resistance at 1.0970 – 1.0990 and stopped there. Herewith short-term indicators left oversold areas. Such neutral state on the day of publication of nonfarms increases risks of unpredictable market reaction. Therefore, to cautious traders we recommend not taking a risk. To aggressive traders we recommend considering euro’s purchase in the range 1.0910 – 1.0930 in the first half of the day before publication of labor report with short stop at 1.0850. The aim is at 1.1020 – 1.1030. 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. 


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