Vector Securities - Analytics

    Vector Securities

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    Oil, shares, the Fed …

    All these points, mentioned in the title, got so closely intertwined that it is impossible to separate them in order of their influence on the exchange market. Yesterday’s repeated speech of Janet Yellen in the Senate Committee gave no relief to financial markets. Despite all attempts to convince all in good prospects of American economy, there was concern about forming circumstances in world financial markets in her answers to questions. Quiet panic spreads on them. Yesterday Light oil prices renewed multi-year minimums, stock indices fell worldwide. Market players are feverishly searching for safe assets, one of which is yen. Growth of Japanese currency has become so aggressive for last days that talks about inevitable currency interventions of the Bank of Japan have appeared in the market. In the afternoon the SNB head, concerned about strengthening of Swiss franc, has claimed that the Bank is ready to currency interventions if it is necessary. As it happens often in nervous atmosphere, markets catch any news as at straw. Yesterday such news was the message about readiness of oil-producing countries to agree in limits of oil production, appeared at the end of American session. It provoked sharp bounce of stock indices from minimums, growth of trade currencies, fall of yen and euro. Characteristically, information about attempts of oil producing countries to agree on limits of oil production appears not for the first time, but it comes to nothing every time. Still, the market works off this event every time. 
    Today on the agenda is two main events – the Eurozone GDP for the 4th quarter and US retail sales. In both cases, some improvement of situation is expected in contrast to previous results. Now it is useless to try to predict anything relying on analysts’ forecasts. Recently forecasts have rarely coincided with the reality, herewith reality turns to be worse than predicted. Today weak data on US retail sales will be fatal for the market. In this case panic will return to the market and fall of stock indices will renew.
    Trade tactics:
    At yesterday’s trades dynamics of EURUSD pair made us leave the market and close our long position for 1.1340 at the end of American session. Probably the pair formed its local maximum yesterday. Bounce to 1.1230 – 1.1240 is possible. Current ascending trend remains in force till the pair is above 1.1150. In case of closure of the week above 1.1320, continued growth to new maximums is highly possible.
    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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