Vector Securities - Analytics

    Vector Securities

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    China disappoints us again, but the market is tired of negative

    Holidays are holidays – low liquidity, low activity and weak news background. Monday was boring, except opening of Asian session. In the morning, the market regained lifting of Iran sanctions, and got satisfied with it. Next Asian session was more active. The reason was statistics from China. Almost all indicators (industrial production, retail sales, GDP) were worse than expected. Traditionally trade currencies fell, still, this period of weakness lasted not for long. The market is tired of bad news. Some players preferred to fix profit on facts. As a result, everyone returned to initial positions.

    This day can be called European one. Main news flow will be from Europe. Final data on inflation from the Eurozone will hardly surprise the market. They are practically regained. However, revisions occur sometimes. Payment balance of the Eurozone isn’t interesting either. Now it is not threatened. ZEW report on moods among investors attracts attention most of all today. The forecast promises worsening of report’s components. For euro bulls it is a bas sign. The pair can return to the range 1.0800 again. The more so since for the whole morning futures on American indices have been in green zone, giving signals of probable stabilization of stock market, In this case euro won’t be able to use weakness of stock platforms. Another event, which attracts attention, is the report on inflation in the U.K. Here forecasts are also weak, what can provoke renewal of minimums in GBPUSD pair. Still, pound looks oversold, the pair needs correction. It is possible that first negative reaction will be followed by bounce. Dollar’s index returned above 99.00 after the common currency rolled back below 1.0900. Its further growth is possible on condition that stock platforms stabilize.


    Trade tactics:

    Yesterday we opened short position in USDCAD pair from 1.4572, as we had presumed in morning overview, stop is set at the entry point. The market gave such opportunity closer to the end of American session. The nearest aim is at 1.4480. In the short term testing of the range 1.4420 – 1.4440. We do not recommend keeping short positions in this pair for long – the trend remains descending for Loonie. This week the Bank of Canada session, which is scheduled for tomorrow, will become the key event for the pair. 


    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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