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    Vector Securities

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    The beginning of the year is fully up to dollar

    The second trade day of new year is fully up to dollar. The factors, which facilitate this movement, were the same – weak inflation of the Eurozone, concerns about prospects of Chinese growth, geopolitical tension. 
    This day is full of various reports. The common one for different regions is index of business activity in service sphere. Once again, Chinese PMI was weak, what influenced trade currencies and provoked renewed fall of stock indices in Asian region. These moods can spill over European and American platforms. In the Eurozone business activity is in better position. Production PMI was better than predicted. Probably, today’s indices will be revised upward too. Still, it helps little to euro now. Low inflation has negative influence on dynamics of the common currency. Besides, today the Eurozone will release producers’ prices, which will hardly add optimism. PMI in service sphere will be also published in the U.K. This week there is little statistics on British economy. Therefore, the reaction to PMI can be too active, especially if it is weak. Today there will be numerous interesting reports from the U.S.A. – ISM in service sphere, the data on employment in private sector by ADP, trade balance, production orders. Here it is difficult to predict something. Everything can be in the reality, with corresponding reaction to it. However, forecasts can be called moderately positive in general, what retains positive mood in favor of dollar. In addition, common strive to lower risky investments against the background of weak statistics from China retains dollar’s attractiveness. Today, from our point of view, the most uncertain factor is publication of minutes of last FOMC session, at which the decision on increase in rates was made. They won’t bring any revelations. Still, on one hand, they will confirm the Fed’s commitment to tighten monetary policy, and on the other hand, hints for low rates of this tightening can disappoint market players. 
    Trade tactics:
    We have to admit that it was too hasty to leave short positions on euro the day before. At this moment there are no conditions for purchase of EURUSD pair, though to jump into moving train is always difficult. Nevertheless, it is the only option for aggressive traders now. We suggest considering pair’s sale in the range 1.0745 – 1.0765with stop at 1.0840. 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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