It is quite an eventful day today!…Rate dynamics and recommendations on EUR-USD and GBP-USD. by OpenForex.com

It is quite an eventful day today!…Rate dynamics and recommendations on EUR-USD and GBP-USD.

07:50 06/03/2004

It is quite an eventful day today!…Rate dynamics and recommendations on EUR-USD and GBP-USD. Three key market events are expected today. The first one is ECB meeting, where the question of changing refinancing rate, which equals 2% per annum, will be discussed. Press conference upon the results of ECB Board of Governors’ meeting is scheduled for 15:45 Moscow time. The majority of analysts think that the rate would remain unchanged. The second important event is U.S. Labor market report. Jobless claims in the U.S. during the week up to May 29 (forecasted as 335000, the previous value equaled 344000) scheduled for 16:30 Moscow time. The series of less important indicators on production development in the U.S. will also be released at 16:30 Moscow time. The reports are published on Thursday, as today is the last working day this week. Let us remind that if unemployment indexes show jobless claims’ increase, the market will interpret it as a signal, warning about the strengthening of inflationary pressure on the U.S. economy, which will force FRS to take measures, restraining the given factor and protecting economy from overheating. In other words, FRS will have to raise refinancing rate, which equals 1% per annum at present. Rate hike is always a supporting factor for the rate of the national currency. The third significant event is the meeting of OPEC countries. The following issues will be discussed at the meeting: OPEC oil quotas, prices for raw oil and secondary products of oil processing. Decision to reduce prices will definitely weaken the pressure that is put on the dollar. Though, it is hard to predict what decision will OPEC countries make. We should keep in mind that the majority of oil corporations have assets of the largest American oil concerns in their structure. That is why, in the process of decision-making OPEC will count the opinion of that lobby, whereas the EU pressure will be regarded only as recommendations. You should pay attention to stock exchange growth in the U.S. all the leading indexes of NYSE closed out with confident rise. That means that the Wall Street optimism is on the high level. Recommendations: There seem to be more factors in favor of the dollar. That is why the previous recommendations remain. Close out longs on EUR and GBP at the current rate, or shift them in break-even. Restrain from “short” position, as it would be against the trend. Wait for supporting technical signals. Recommendations: There seem to be more factors in favor of the dollar. That is why the previous recommendations remain. Close out longs on EUR and GBP at the current rate, or shift them in break-even. Restrain from “short” position, as it would be against the trend. Wait for supporting technical signals.

The forecast was created by trans1.