What concerns outcomes of Friday, it’s quite simple – regular series of weak data knocked down dollar again. Almost all statistics from the U.S.A. were worse than predicted – NY production activity as well as industrial production and Michigan University Consumer confidence index. Herewith dollar’s sellers have started to experience problems – dollar’s index closed at regular local minimums mainly due to the common currency, which predominated in its calculation. Despite weak data, dollar succeeded to strengthen against almost all other currencies. It can be a signal that the bottom is near for the dollar.
Everything is still in the hands of current statistics. This week there will be a lot of statistics, first of all, in Europe. European currencies will have to prove their competitiveness and economic reports will be sifting them. For euro, main reports are ZEW, IFO, preliminary indices of PMI business activity, German GDP for the 1st quarter. Herewith, forecasts don’t promise improvement. Especially it concerns forecasts on Germany. For pound this week will be also tense – inflation, minutes of the Bank of England, retail sales. Here forecasts are neutral, and pound’s dynamics will largely depend on general dynamics of the market. For dollar the situation remains complicated too. Several important reports will be published – on housing, minutes of last FOMC session, inflation. It is difficult to predict anything. Investors’ hopes for improvement aren’t met as well as analysts’ forecasts. In fact, this week investors will have to make a choice based on the answer to the question: “Where is the situation worse?” Technically, signs of dollar’s oversold have started to appear, and if circumstances allow, then depending on published data conditions for its strengthening can form this week.
Today, on the first day of work week, news background is practically empty. All main events will start later, what gives an opportunity to continue pressure on dollar, proceeding with the inertia of current middle-term trend.
On Friday, we again opened euro’s long position from 1.1330 on euro’s decrease before publication of American statistics. At this moment stop is set at the entry point. We presume there will be euro’s rollback from maximums this week, but we expect formation of the top above 1.1500. We consider aims in the range 1.1520 – 1.1540 as a working version, where we are going to close our euro’s purchases and open short position with stop at 1.1700.
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