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    Dollar faces the wave of profit fixation

    Dollar faces the wave of profit fixation
    Against the background of empty calendar dollar bulls failed to keep at reached levels yesterday. Unsuccessful attempts to break through below 1.0800 for a day and a half after opening of the market in pair with euro provoked reversal of the pair in the direction of lesser resistance, what was followed by profit fixation in most currency pairs. The movement is technical, without obvious fundamental support and stability of this rollback is doubtful now. 
    Today our expectations of market’s dynamics are contradictory. Two main events – houses sales in US secondary market and minutes of the last session of the Bank of England are at the top of the agenda. Recently housing market has shown good dynamics, its further growth is expected. Under conditions of positive data it can become a reason for renewed growth of dollar on wide spectrum of the market. The influence of minutes of the Bank of England are more local and focused mainly on British pound. And here opinion of IPS’ members is of interest concerning the question of rates’ tightening in view of recent statements by Carney. Pound showed inactive reaction to yesterday’s weakness of dollar, publication of minutes is a good reason for activation. If minutes show that the discussion about monetary policy tightening was wider than before, then pound will rapidly reduce its backlog. One more event will happen late at night – session of the Reserve Bank of New Zealand on monetary policy will be held. Most analysts expect decrease of rates, disagreements are only about the value of reduction – by 0.25 or o.5 basic points. Market’s reaction depends on this very fact. 0.25 basic points are almost in price and decrease of New Zealand dollar on publication of decision will be probably short-term. 
    Trade tactics:
    Our yesterday’s evaluation of situation was incorrect – dollar bulls had not enough strength to break support at 1.0800 in EURUSD pair, what provoked wide-scale profit fixation. Closure above 1.0900 changed technical picture seriously. Now, in case of breakthrough above 1.1000, euro will have chances to widen correction to 1.1060 – 1.1080 with prospects to 1.1180 – 1.1200. Today we consider an option of pair’s purchase from 1.0910 – 1.0930, stop at 1.0850.
    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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