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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Rate dynamics and recommendations on EUR-USD and GBP-USD.
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12:17 06/01/2004
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Rate dynamics and recommendations on EUR-USD and GBP-USD.
On Monday, markets were closed in the U.S., Britain and Switzerland.
European session’s thin market brought no surprises. Prices on Euro and pound sterling stay on the approached levels, despite IFO business confidence index reduction, which is due to slight growth of inflation in Eurozone. That is also indirectly proved by PPI growth that rose 0.1% compared to the previous value.
Markets are expecting ECB meeting that is due Thursday and that is to reveal ECB decision upon refinancing rate that equals 2% per annum at present. Though, the majority of analysts think that the rates would stay on the same level, as risks of inflationary growth and the rise of Euro are counter-balanced in this situation.
The dollar is still under the heavy pressure of political factors tied to continuing threats of militant attacks, the Near East situation and oil prices growth. Militant acts, conducted in Saudi Arabia, strengthen investors’ fears and result in steady direction against the dollar.
This week’s economic dominant is the release of negative news on Michigan sentiments index, all components of which reduced compared to the previous values, and unemployment rate release sentiments.
Labor market situation can be one of the basic factors of FRS refinancing rate hike decision-making. Though officials might be of different opinions as regards index release, FRS can consider the reduction of the given index as inflation-solving fact and say that the rates will remain the same in the nearest perspective. That is definitely to put pressure on the dollar, as market is waiting for rate hike.
Recommendations:
On EUR – the prices has passed the serious level of resistance. It is very likely that quotations on the given currency pair will consolidate in the area of that level today. William’s alligator arrangement indicates steady uptrend but you should pay attention to the fact that trend is at the peak of its development, i.e. full development of wave 3 of the ascending trend is clearly seen and wave 4 correction development is possible.
We recommend those, who keep longs, as recommended earlier, to pull stops to 1,2120. Those, who are out of the market, should abstain from opening positions.
On GBP – the situation is similar here – price has approached a strong level of resistance at 1,84. Correction might start from here that’s why it is better staying out of the market.
Recommendations:
On EUR – the prices has passed the serious level of resistance. It is very likely that quotations on the given currency pair will consolidate in the area of that level today. William’s alligator arrangement indicates steady uptrend but you should pay attention to the fact that trend is at the peak of its development, i.e. full development of wave 3 of the ascending trend is clearly seen and wave 4 correction development is possible.
We recommend those, who keep longs, as recommended earlier, to pull stops to 1,2120. Those, who are out of the market, should abstain from opening positions.
On GBP – the situation is similar here – price has approached a strong level of resistance at 1,84. Correction might start from here that’s why it is better staying out of the market.
The forecast was created by trans1.
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