Vector Securities - Analytics

    Vector Securities

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    Everyone's doing their own thing

    Everyone's doing their own thing
    Currencies continue to move according to their own plans, orienting at “their” data. Yesterday the common currency failed to leave its range. For pound the day was more favorable – British industrial production, on the contrary, was better than predicted, and pound managed to fix itself above 1.5300. Trade currencies continued to react to movement of energy prices and dynamics of stock markets. Under such mess, dollar’s index stayed practically unchanged. So, the market still lacks general agreement.

    Speaking of today’s notable events, there are trade and payment balances in Germany, minutes of the ECB last session, and regular session of the Bank of England on monetary policy. Although euro has long paid little attention to current balances of the Eurozone, still, the lack of negative is a good signal. Besides, Draghi’s cautious rhetoric about widening of incentive measures at last session can be also considered as a positive. The same point of view can be reflected in minutes. Pound is in a more complicated situation. No one remembers increase in rates, though at the beginning of the year this issue was quite relevant. Too cautious comments on outcomes of today’s session can become a cool shower for pound. At the same time, publication of minutes of FOMC latest session can become the most significant event today. The Fed refusal to increase rates at this session was perceived frostily by the market. Besides, Janet Yellen has repeatedly given persistent signals that rates will be increased this year. Still, recent series of weak economic reports make even calm investors doubt it. So, the text of minutes will be put under microscope again. We will not go as far as to predict the result of such analysis. Market situation remains uncertain, and exit is possible to any direction.

     

    Trade tactics:

    Of the two options of entry into the market, which we suggested yesterday, the option with British pound worked. We opened long position for 1.5262 in GBPUSD pair, stop is rearranged at the entry point. In view of uncertainty of market’s reaction to the Bank of England decision, we are going to close the position before publication of communiqué. Now EURUSD is in upper part of the range, yesterday’s option of pair’s purchase at breakthrough 1.1300 upward is still interesting. However, as we have already noted, in this case stops are to be set too far from entry point, what will provoke to considerable losses if breakthrough fails.

     

    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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