Vector Securities - Analytics

    Vector Securities

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    Now there is no single dynamics in the exchange market

    Now there is no single dynamics in the exchange market
    Dollar wants to grow, but can’t. Euro can grow, but doesn’t want. We would describe outcomes of the previous day this way. Yesterday PMI indices of the Eurozone showed contradictory results – German indices were worse than predicted, French ones were quite good, the Eurozone as a whole was acceptable. Still, investors weren’t very impressed with it. Euro’s attempt to grow failed quickly. There are too many problems in the Eurozone and around it – political ones (Ukraine, Macedonia) as well as economic ones (Greece, outlined cooling of German economy), let alone quantitative easing by the ECB that is gaining momentum. Yesterday dollar, in its turn, tripped over American statistics – houses sales in the secondary market dropped unexpectedly. The lack of signals of stable economic recovery limits opportunities for dollar’s growth. Yesterday British pound was in most favorable situation – the data on retail sales for April showed good results, exceeded forecasts threefold, what allowed British pound to become the only leader at yesterday’s trades.
    The final day of the week is eventful and it can become the reason for higher volatility of the market. Speaking of economic statistics – there is IFO report and German GDP for the 1st quarter, inflation in the U.S.A. and Canada, retail sales in Canada. Last economic data on Germany have shown quite stable cooling of German economy. There is a high probability that IFO report will show the same and it is a serious limiter of growth for euro. Still, players’ attention will be on American statistics, first. And here sharp growth of inflation isn’t important (and no one expects it at this moment), but its moderate growth without failures is necessary. As usual, it is all about unpredictability of American statistics last months. Results below forecasts are able to collapse dollar. Considering expected speeches of the ECB head Draghi, the Bank of England head Carney, the Bank of Japan head Kuroda, the day can be quite tense with multidirectional movement of currencies. Now we consider the situation as unclear. 
    Trade tactics:
    Well, yesterday we were hasty with recommendation on short stop. Minimal splash of volatility provoked its work. However, under this multidirectional movement, which the market showed the day before, it was difficult to determine the moment of entry into the market. Now EURUSD pair doesn’t show clear preferences in choice of movement. Much will depend on the level of closure of the week – if the closure is below 1.1100, then support level at 1.1060 will be under threat, if it is above 1.1200, then new attempt of growth to 1.1400 – 1.1500 is possible. For today we recommend considering the tactic of entry into the market under breakthrough of current range – to buy euro under breakthrough of 1.1190, stop at 1.1090; sell euro under breakthrough of 1.1060, stop at 1.1130. After opening of position, rearrange stop at the entry point, if the price comes for more than 30 points in the direction of opening. 
     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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