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    Dollar is retreating, but very cautiously

    Dollar is retreating, but very cautiously

    On Friday dollar made one more step back. As expected, American inflation couldn’t support it, and remained at low levels. The University of Michigan consumer confidence index, which was above forecasts, appeared to be a cold comfort for dollar. Cautious movement of the market indicates that players lack clear understanding what to do further.

    Global fundamental factors remain unchanged – expectations of discrepancies in monetary policy of regulators are on the agenda, for the Eurozone Greece is still on the verge of default. So, now there is no talk of change of global trends. However, trends are rarely linear. Now there is only the question of depth and time of current correction. This week indices of moods of the Eurozone (ZEW, PMI, and IFO) and American statistics (housing and durable goods orders) will be the main events, which will attract attention. From our point of view, while dollar’s index is within the frames of outlined monthly range 96.30 – 100.00, the market remains in uncertainty, where it can stay till the end of the month. The market is overloaded with long positions on dollar and it will “shoot” sooner or later. Still, the lack of confident “pulse” movement under correction indicates players’ unwillingness for mass closure of these long positions. This week for us the working scenario is continued slow retreat of dollar with high risks of change of this movement to the opposite.

     

    Trade tactics:

    On Friday we closed our long position in EURUSD pair for 1.0835. Descending trend isn’t broken, the game against the trend is linked with higher risks. Now we have no clear view of further dynamics of the pair, so we take a pause again. Monthly range is outlined 1.0520 – 1.1030, consolidation is possible in this range till the end of the month.

     

    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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