Tickmill - Analytics

    Tickmill

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    USD took a time-out before the next march up north!

    Good day!

    Last week the USD continued its descending correction, which was caused by weak data from the US.

    The FRS’ decisions depend largely on the incoming macroeconomic data, so the USD movement may increase, however low expectations on the interest rate increase may slow down the rising strength of the USD. But it still remains the strongest currency among the developed countries. The difference in growth ratio of the American economy and the rest of the world supports the USD. Also the ECB has made a point that it is not willing to back down on its quantitative impending program, which is going to, in mid perspective, keep the Euro down, and essentially strengthen the USD.

     

    EUR/USD

    GBP/USD

     

    ECB has clearly explained during its latest meeting that it is ready to lead their QE program into Q3 of 2016. Soft monetary policy and the Greek comedy which is gaining momentum continue to push the Euro back down.

    We should try and sell the EUR at  1.1100, where the upper side of a possible flag goes:

    The GBP has lately gone into a flat and is trying modestly to regain footing. Although these attempts of growth should be viewed as possibility for new sales, considering low inflation and upcoming elections. Last week, from the CPI report it became certain that UK managed to avoid deflation. Despite that , everything can change as soon as next month which in perspective can push the GBP down. The Federal Open Market Committee may also show interest in low inflation. We can learn about that from the last “minutes” of the Bank of England.

    On the daily chart we have a descending channel:

     

     

    Next, most likely, we will sell at the breached ascending channel, which was leaning against three spots:

    A sale of the GBP at this point seems like a sensible thing to do:

     

    Let us monitor the candlestick signals at this point.


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