There is nothing to comment on the outcomes of Friday, it’s enough to take a look at figures of labor report from the U.S.A. The last time such weak data appeared more than a year ago. It is quite banal, but the labor report confirmed own unpredictability once again. The result was logical sharp weakening of dollar. Short-term prospects of American currency worsened significantly. Still, additional drivers are needed to strengthen negative effect of nonfarm payrolls.
This week the exchange market is to evaluate the significance of weak data on labor of the U.S.A. It will be difficult to do it – there is very few American statistics. The main focus is on minutes of last FOMC session. After series of weak economic reports, players will be more cautious examining the content of minutes and the ambiguity of statements can be interpreted not in favor of dollar. This week European statistics are, on the contrary, more saturated, but they don’t show stable results either, and rarely meet forecasts. So, dollar isn’t expected to pass its positions easily. There will be a tough fight with work on actual data.
Speaking of local events, we’d like to highlight sessions on monetary policy by three regulators – the Bank of Japan, the Reserve Bank of Australia, the Bank of England. The RBA attracts particular attention. Continuing stagnation of resource prices has a negative influence on Australian economy, what can make the regulator decrease interest rates again. At least, the market expects it. And this expectation can provoke reaching of new annual minimums by Australian dollar regardless of market’s dynamic. Other regulators aren’t expected to bring any surprises and the reaction of currencies is to be minimal.
Today in some countries catholic Easter is celebrated, so trades can be inactive in the first half of the day. In the evening American ISM in service sphere will be published. Last week the similar production ISM decreased more than predicted, so, it’s quite possible that this indicator will disappoint too. Although American dollar’s positions have been challenged, fresh drivers are needed. Now market’s dynamic will react more actively to actual figures of economic indicators.
Our attempt of middle-term entry to the market failed – the position was closed on Friday on stop without loss. Potential profit was just an illusion. Unfortunately, we kept the position overtime. At this moment technical picture in EURUSD pair gives contradictory signals. Short-term indicators have reversed upward, but higher, at 1.1050 there is a strong resistance, which has already become an obstacle for further development of correction several times. Now we are going to take a pause and watch the development of situation from the side.
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.