Yesterday dollar managed to improve its position considerably against the background of low liquidity caused by day-off in the U.S.A. Increase in Asian and European stock markets had its effect, there movement became the continuation of positive closure of Friday at American platforms. Besides, Chinese investors joined this process after the end of these holidays. Japanese shares grew after Abe’s statement about undesirability of high volatility because of sharp strengthening of yen at the beginning of the month. It facilitated additional decrease of yen, what the stock market perceived positively. Yesterday growth of risky assets also facilitated further decrease of euro in thin market. And Draghi’s speech in European parliament provoked disruption of stops at 1.1150, first serious support was broke up. Market players disliked words of the ECB head about readiness to take as a pledge in REPO operations bad “bonds” of Italian banks.
Today the main question is whether the common currency will manage to stay above second key support at 1.1060 after publication of ZEW report on moods among investors. The forecast promises weak data, still, it is possible that yesterday’s fall of euro had already included them in current prices. So, once again, everything in this pair will be defined by dynamics in stock markets, which are still optimistic. There is no specific negative for change of these moods. Today there are no significant events in the U.S.A. – there is only production activity of NY, where some improvement is expected. Late in the evening the data on US capital inflow will be published, but they haven’t had influence on trades’ dynamics recently. Speaking of local data, we’d like to highlight report on British inflation. Strong figures are unlikely to appear against the background of fall in energy prices (recent bounce couldn’t influence published data). Therefore, pound is unlikely to change skeptic attitude towards itself awaiting referendum on exit from the EU. At the same time there are positive moods about risky assets at Asian session today. Brent price reached last week’s levels, stock markets continue to follow it. It continues to press euro, but supports trade currencies.
Previous day was unlucky for us. We opened long position in euro for 1.1205, beat out on stop at 1.1150. Still, even under these conditions our main scenario remains the same – we expect renewed growth of EURUSD pair to new local maximums. Today we will look for opportunities for repeated opening of long positions below 1.1150 after publication of ZEW report, stop at 1.1060. If there is no such opportunity, then we will enter the market again under breakthrough of 1.1200 – 1.1240.
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