Vector Securities - Analytics

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    Dollar remains uncompetitive

    Dollar remains uncompetitive

    The week has started with consolidation in the exchange market. Dollar has started with moderate correction. There were no surprises. The data on payment and trade balances were slightly worse than predicted, still, surplus remains high. For euro the negative factor is notable decrease of export, though it hasn’t become a stable trend yet. During the day trades were technical and without clear movement direction. Despite some retreat of dollar yesterday, trend’s reversal can not be talked about. Today at Asian session dollar has continued its attack and renewed regular maximums.

    Today there are no global events either. France and Italy will publish the data on industrial production for January. Usually these reports aren’t very significant. ECOFIN regular session will be held, surprises aren’t expected. In the U.S.A. news background is practically empty too. Speaking of local events, we’d like to highlight scheduled speech of the Bank of England head Mark Carney. If he gives hints of probable early increase in rates once again, then pound can sharply bounce from current minimums. In general, the lack of strong drivers points at probable calm trades with continued moderate strengthening of dollar.

     

    Trade tactics:

    Monday’s correction of dollar allowed technical indicators to “ease” and leave overbought area. The trend remains undisturbed and the most preferable tactic is still dollar’s purchases. Yesterday we renewed sale of EURUSD from 1.0890, stop is rearranged at the entry point, nearest aims are in the range 1.0720 – 1.0730. At this moment there are no signals for euro’s purchases, and any purchase of the common currency is linked with an increased risk. To weaken sales’ pressure on EURUSD pair it is necessary to close the day above 1.0900.

     

    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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