Vector Securities - Analytics

    Vector Securities

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    Outcomes of FOMC make players correct their expectations

    Outcomes of FOMC make players correct their expectations

    This week has started with the same what was at the end of the previous one – dollar’s weakening. It happens for no objective reasons. Houses sales in US secondary market didn’t reach forecasts, still, they grew. So, this fact didn’t play a key role, the more so since dollar started to decrease at European session. In his speech, Mario Draghi was full of optimism, still, he didn’t say anything sensational. It seems that outcomes of last FOMC session have become a watershed. Players have started to reevaluate own expectations of regulator’s actions. Now in the U.S.A. expectations of increase in rates have shifted to autumn, what provokes fixation of dollar’s long positions.

    This day will be stressful, publication of important statistics in main economic regions can become a reason for it. In the Eurozone it’s preliminary indices of business activity for March. For euro it’s crucial to get a support for development of outlined correction. The situation is still uncertain. The end of the month is close and there will be a stubborn struggle. British pound is in the similar situation.

    Hopes for increase in rates were questioned by series of weak economic reports and the speech of representatives of the Bank of England. Today the U.K. will publish the report on inflation and pound will also need a support to follow euro upward. Today dollar has also its assets – it’s the report on consumer inflation. The Fed has already lowered its forecasts on inflation for this year and if today’s data are worse than predicted, then dollar will get one more blow. As we have already noted in yesterday’s overview, this week the market will probably orient at facts, so repeated change of movement direction of the market is possible.

     

    Trade tactics:

    Yesterday we opened long position in EURUSD pair from 1.0770 according to our recommendation, stop is already set at the entry point. At this moment technical indicators are already reversed upward, the price of enter allows to feel comfortable and hold the position without risks of losses. The nearest aim is 1.1020 – 1.1040, herewith there is a potential for further growth.

     

    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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