It was unexpected, as yesterday dollar started growing on completely empty calendar and the market didn’t even try to test new minimums against dollar, though outcomes of Friday pointed at such opportunity. Apparently, players decided not to await realization of negative reports on European data and started profit fixation beforehand.
Today there is a lot of statistics and trades are likely to be active. The starting point was at Asian session – the Reserve Bank of Australia published minutes of its last session on monetary policy and the Reserve Bank of New Zealand released its report on inflation expectations. And here participants of the market found more surprises in the report of the RBNZ, as it didn’t contain clear indications of rapid weakening of monetary policy by the regulator, what provoked growth of New Zealand currency. The continuation will be at European session. First, reports on inflation will be published in the U.K. Expectations are neutral, and in case of lack of surprises pound’s reaction can be quite calm. Then it will be turn of the Eurozone. First of all, ZEW reports on moods in business sphere are of interest. And there everything is complicated. Forecasts are negative, but we find it difficult to predict market’s reaction. We presume it’s quite possible that euro’s reaction to negative data will go no further that short-term decrease and the period of weakness will be short. Middle-term prospects of the pair will depend on how stable will be euro going through this negative. Final data on inflation for April and trade balance of the Eurozone won’t have significant influence on dynamics of the common currency. Recently the issue of inflation has become less urgent, the topic has left front pages. Increased energy prices during last month give a hope for moderate growth in the short term. The day will finish with the data on laying of new houses and building permits. And this question is absolutely “terra incognito”. Last time statistic forecasts on many regions have rarely coincided with the reality and for US economic data it has become the norm. This time growth of indicators is expected, but it’s impossible to predict what will be in the reality. We can only say that if this time reports are also weak, then outlined growth of dollar won’t be developed. Anyway, today the market will decide finally on movement direction only after publication of last reports.
Once again, we fell into the trap of trend movement – it is never direct and linear, as a result our position from 1.1330 was closed on stop without loss. Herewith, the lack of final rush in the form of testing of levels in the range 1.1500 makes an impression of incomplete movement. At this moment the state of the market is unclear for us, and we are going to make a pause. The answer to the question whether dollar returned to growth trend is still unclear for us.
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.