Vector Securities - Analytics

    Vector Securities

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    Last days of the week can provide guidance to the market

    Last days of the week can provide guidance to the market
    One more day passed under the sign of uncertainty in the exchange market. Players can’t decide where to move further. By the middle of the day stock markets stabilized and till the end of the week there is a hope that such condition will remain due to celebration of the end of the Second World War in China. American statistics were largely worse than predicted, still, they can’t be called a total failure. Market’s reaction wasn’t very impetuous, and ended quickly. The reaction to the Fed’s Beige Book, which contained confirmed evaluation of moderate recovery of US economy, was calm too.

    This week there are two events, which are able to speed up the market – the ECB session and US report on labor. It will be on the condition that hopping will subside in stock and raw markets. Today the ECB session on monetary policy will be held. The regulator is unlikely to take some steps, once again it depends on what Draghi will say. The situation has changed since previous session – stock markets and raw material prices fell. The last one increases threat of renewed deflation pressure on Eurozone’s economy. Besides, last sharp growth of euro shows that in case the Fed won’t increase rates in September, then the common currency can demonstrate sharp spurt, what will just strengthen deflation risks. The ECB representatives have already given hints of probable widening of quantitative easing volumes, still, the question remains whether Draghi will express such warnings following outcomes of today’s session.


    Trade tactics:

    After a three-day consolidation in the range 1.1200 – 1.1300 in EURUSD pair the situation remains uncertain. Inability to fix itself above 1.1300 has considerably worsened prospects of the pair. Our technical indicators suggest the possibility of further decrease of the pair in the direction of 1.1000. To aggressive traders we recommend considering euro’s sales under breakthrough of 1.1200, stop at .1250. 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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