Vector Securities - Analytics

    Vector Securities

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    The stock market turns cartwheels, the exchange one is more restrained


    Yesterday American statistics couldn’t support dollar. PMI in service sphere fell below 50 points (still, this indicator is no longer interesting for analysts), houses sales were worse than expected too. Contradictory signals of energy prices didn’t facilitate optimism either. As a result, the stock market shrunk sharply at the opening. However, this year the stock market has shown increased volatility and frequent change of moods. In the middle of American session investors became interested in purchases at lower levels after correction. Besides, energy prices went upward too. It was followed by sharp bounce and closure of American indices with good profit and prospects of continued rally. In the exchange market only yen and trade currencies reacted to this reversal.

    Today dollar bulls have chances to make one more attempt to recapture the initiative. Europe will publish final data on inflation for January, which even in case of upward revision, can’t support euro considerably – inflation for February is already on the agenda. The second evaluation of British GDP won’t be useful fro pound either – passions over the referendum overshadowed all other problems, only negative is perceived. The main event of this day is the report on durable goods orders in the U.S.A. In case of positive data (forecasts give such hope), investors’ interest to risky assets will strengthen. For dollar bulls it will be easier to achieve their goals with such support.

     

    Trade tactics:

    Now we stay out of the market. We have no new ideas of entry into the market at this moment. In technical terms, we regard this situation as unclear. Our middle-term indicators in EURUSD pair are still targeted downward, but the range 1.0800 – 1.1000 has too many levels, which can become an obstacle for further decrease.

     

    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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