Vector Securities - Analytics

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    Consolidation continues in the market

    Consolidation continues in the market

    The first day of the month passed calmly. Movement pattern hasn't changed – dollar retains attractiveness for investors, though the dynamic of its strengthening has weakened. In the first half of the day quite good statistics from the Eurozone (deflation process has slowed down, unemployment situation has improved) allowed most currencies, first of all euro, to regain losses incurred as a result of market’s opening, then at American session players renewed dollar’s purchases. Herewith most part of American statistics published yesterday had no contribution to it (production ISM and building expenses decreased). Now it reflects relevance of current trend.

    The RBA has already finished its session on monetary policy and left interest rates unchanged. To a certain extent, it was unexpected – the market had been laid at decrease by 0, 25 p.p. After such decision Australian dollar increased by half a figure and probably today it will continue to regain this decision.

    During the rest of the day news flow will come from Europe and Canada. Germany will publish report on retail sales, and the Eurozone will release the data on producers’ prices. The flow of negative from the Eurozone has almost dried up and today’s statistics aren’t expected to bring anything dramatic. It prevents euro from collapse, but it’s not enough for trend’s reversal. Today we don’t expect any changes in players’ moods – even with positive data euro’s growth will be moderate.

    Canadian dollar is in the same condition. Last week speech of Poloz cooled loonie bears, what became just an episode. Common trend of dollar’s growth is still retained, Canadian dollar won’t go against the trend, still, short-term miscorrelations are possible. Today in Canada producers’ prices and GDP for the 4th quarter will be published. On the threshold of the Bank of Canada session players will be cautious. Weak PPI will be an argument for rates reduction, still no one is confident in it.

     

    Trade tactics:

    Now our view of the market remains the same – EURUSD pair is striving for previous minimums in the range 1.1100, though strength of this movement has considerably weakened and technical indicators have started to give signals that the pair is oversold. What concerns trading – we closed our short position for 1.1210 on euro’s rollback above 1.1200 and made one more attempt – reopened it for 1.1235. If this time we also fail to await announced aims 1.1100 – 1.1120, then it’s time to take a break.

     

    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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