Vector Securities - Analytics

    Vector Securities

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    Everyone is waiting for FOMC

    Everyone is waiting for FOMC

    On the threshold of FOMC session, players fear to make sharp movements. Players’ reaction to yesterday’s events was limited. ZEW report was quite good. Although euro reacted negatively to the fact that in Germany expectations were considerably below forecasts, still, they grew. The rest of the report’s components looked good. So, euro’s negative reaction was very short-term, after what partial fixation of dollar’s long positions continued. Weak data on laying of new houses in the U.S.A. accelerated the process slightly, but there everything ended quickly too. Nobody wanted to take a risk. 

    Today the market is at a crossroads, choosing where to go further. Outcomes of FOMC session can draw the market out of this state. Most players have got ready for tightening of final communiqué. Besides, fresh forecasts on inflation and economic growth will be announced. It will be difficult for players to quickly orient in new information, so there is a high probability of sharp changes in price in narrow ranges during first minutes of publication of session outcomes and the speech of the Fed head Janet Yellen. Taking into account the duration of current trend of dollar’s growth and technical factors, we tend to believe that under any outcomes of the session, the market will eventually opt for correction. Herewith, we don’t exclude that during the reaction dollar’s recent maximums can be renewed. During the day the market will also have something to do – minutes of the Bank of England last session will be published. Besides, the U.K. will publish the report on labor market, where unemployment is decreasing at quite high rate. Pound has chances to start first even before FOMC session.


    Trade tactics:

    It is utterly hopeless to try to guess and jump into the market at any change of movement direction after announcement of FOMC session outcomes. It’d better to wait through this period. To aggressive traders we recommend to search for points for EURUSD purchase below 1.0500 with stop at 1.0350. We are going to set buy order in the range 1.0470 – 1.0480.


    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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