Vector Securities - Analytics

    Vector Securities

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    Yellen ruined dollar’s strength

    Speaking of previous day, it’s quite simple – Janet Yellen collapsed dollar. This may be an exaggeration, but she spoilt moods of dollar bulls considerably. By the end of the day dollar passed its positions against all main rivals, and worsened its short-term prospects significantly. The Fed head continued cautious policy towards further steps to monetary policy normalization by the Fed. She specifically noted threats from slowdown of world economy and that the cycle of increase in rates will be “extremely gradual”. Her “soft” rhetoric practically means that rates won’t be increase in April. What concerns this day, it is also quite simple. Two events are in the focus of attention – preliminary data on German inflation for March and the data on employment in US private sector by ADP. Under current conditions, the second indicator seems to be informational and is unlikely to influence market dynamics considerably. Investors will prefer to await official statistics on labor market, which will be published on Friday. Then German inflation can influence trades significantly. If expectations are met, then it will become the strongest splash of inflation for last year, herewith during two months in a row, what will support euro and retain general negative attitude towards dollar. 
    Trade tactics:
    After yesterday’s closure, EURUSD pair retains good prospects for further growth. Testing of previous local maximums of this year at 1.1370 – 1.1380 is on the agenda. The breakthrough above 1.1380 – 1.1390 can provoke work of stops and speed-up of growth. Closure above 1.1400 makes the movement towards August maximums of last year at 1.1710 relevant. Yesterday we opened long position from 1.1220, stop is rearranged at the entry point. Now our recommendation is to keep. 
    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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