Vector Securities - Analytics

    Vector Securities

    377.25 5.25/10
    73% of positive reviews
    Real

    Greece restrains euro

    Greece restrains euro

    Last week ended with inactive trades. Players have no clear understanding of what direction they should choose. Euro’s growth is still restrained by the lack of progress in Greek issue. On Friday even quite good data on GDP in the Eurozone, which were better than predicted, couldn’t help it. Once again, the market faced uncertainty; additional drivers are needed to make further decisions.

    This week US news background will be weak again. Besides, this day is a holiday in the U.S.A. – Presidents’ Day. Minutes of FOMC last session may become the most significant news. Although dollar strengthened following its outcomes, still, the movement wasn’t very convincing, the market regained this first reaction the very next day. So, dollar shouldn’t pin great hopes on this event. However, the day of minutes’ publication on this week will be full of American statistics – reports on producers’ prices, industrial production and housing market will be published. Forecasts are still mixed. Dollar lacks positive. Besides strong data on unemployment, remaining statistics aren’t so impressive. Taking into account technical factors, it restrains dollar’s growth and can provoke stronger correction.

    There will be few new data from the Eurozone too. ZEW report on moods in business environment and preliminary indices of PMI business activity for February will be most notable. At this moment forecasts look quite good, still, the decision on Greek issue is required for implement of probable positive.

    Speaking about local data of this week, we’d like to highlight a large set of reports from the U.K. – inflation, unemployment, retail sales, budget. After Carney didn’t exclude probable increase in rates, and despite low inflation, pound improved it positions considerably. If it also gets a support in the form of improved statistics, then this movement will be more confident. A regular session of the Bank of Japan is of interest too. The effect of monetary stimulation is gradually disappearing, and statements of the officials have had some hints about the lack of necessity to introduce additional measures of quantitative easing, what prevents the yen from further weakening. Japanese currency has opportunities of more substantial strengthening within the correction.

    Today is a holiday in the U.S.A., usually trades are inactive on this day. But for the Eurozone this day is important. Within the framework of the European Commission, one more session on Greece will be held. The reaction of the common currency depends largely on its outcomes. In case of lack of progress, renewed sale of euro is possible.

     

    Trade tactics:

    We continue to keep our long position on euro from 1.1360, stop is at the entry point. Still, weak reaction of the market to the positive of GDP in the Eurozone worries us. Aims in the range 1.1500 – 1.1510 are still in the focus, but it can be possible if only some progress in searching for compromise with Greece will appear. Now we consider euro’s growth as correction, so accordingly, the game against the trend implies higher risks.

     

    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 or Join us


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