Vector Securities - Analytics

    Vector Securities

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    Renewed uncertainty in the market


    This Monday has showed that market’s reaction to outcomes of the ECB session was rather emotional and players have no clear view of further actions. Therefore the initial reaction was never continued. Most currencies continued correction within Friday’s range. Euro bulls were cautious after regional elections in Germany, the pair is striving to return below 1.1100 again. Rollback of energy prices appeared after new concerns about oil producers’ ability to negotiate after Iran’s statements, provoked weakening of trade currencies. Herewith at Asian session this process intensified after publication of the RBA minutes that showed that the regulator could lower rates this year. Today the Bank of Japan has got off with passive comments on outcomes of its session and not suggested new stimulation measures. It can lead to new cycle of yen’s strengthening. Uncertainty prevails in the market again.

    This day is challenging for dollar. The U.S.A. will release a huge set of important economic reports – retail sales, producers’ prices, production activity of NY, capital flows. Forecasts aren’t very positive, supporting uncertainty of expectations about prospects of US economy. If actual data confirm such mood, then till publication of FOMC session outcomes dollar bulls will find difficult to retain the initiative and the market will continue fluctuating in wide range. Especially since, it isn’t long to wait.

     

    Trade tactics:

    Unfortunately, we failed to keep long position in EURUSD pair – the position was closed on stop without losses. Once again, we “overstayed” in the market hoping for continued regaining of the ECB session outcomes. Now it makes no sense to open new positions till FOMC session – we have no clear view of market situation at this moment.

     

    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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