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    The last day of the month can bring surprises

    The last day of the month can bring surprises
    The results of yesterday’s trades were mixed again. First of all, it was due to stubborn resistance of euro. If British pound fully regained unmet expectations of upward revision of GDP, then what concerns euro, even positive American statistics on housing market had no significant influence on it – buyers’ activity grew sharply below 1.0900, what provoked noticeable bounce of the pair from daily minimums. In the middle of American session, comments of the head of Minneapolis Fed Kocherlakota that inflation would unlikely return above 2 % by 2018, cooled dollar bulls and they practically dropped the resistance.  
    Today is the last workday of the month and it can determine further development of events in the exchange market. Dollar is near monthly minimums, and if it retains its positions, then prospects of its further strengthening will be retained too. Today there are two interesting events – German retail sales and the second evaluation of GDP for the 1st quarter in the U.S.A. In case of positive data, the first report is able to give some support to euro, but it can’t change the global balance of power. This requires to wait till the second report is published. And here is an intrigue, from our point of view. The first evaluation of GDP has detected sharp decrease of growth rates of US economy, considerably below forecasts. Forecasts on the second evaluation of GDP are even worse – expectations fell to downward revision, i.e. fall of the economy in the 1st quarter. It seems dollar must react to this negative with fall. Still, last data from the U.S.A. place a new light on probable reaction of the market. The first quarter is fading, the market is focusing on new data, which have started to meet expectations of revival of US economy. And it can be of crucial importance. So, we are cautious about market’s reaction to worsened indicators for the 1st quarter. And if this revision is as strong as it is predicted, and the data on business activity of Chicago and final results of Michigan University Consumer confidence index show growth, then dollar can ignore the negative of GDP.
     
    Trade tactics:
    EURUSD pair retains uncertainty. The level of month’s closure will be a highlighter for us. If the pair closes below 1.0900, then the probability of further decrease will considerably grow, if above 1.1010 – 1.1020, then dollar can get serious troubles, as in such case the resistance at 1.1050 – 1.1060 will be under threat, the breakthrough of it can provoke mass closure of short positions. To aggressive traders we suggest today considering pair’s sale in the range 1.0970 – 1.1000, with stop at 1.1120. In case of a pair decrease of more than 30 points from the entry point, rearrange stop at the entry point. 
     
    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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