Factors get stronger in favor of the U.S. dollar…Rate dynamics and recommendations on EUR-USD and GBP-USD. by OpenForex.com

Factors get stronger in favor of the U.S. dollar…Rate dynamics and recommendations on EUR-USD and GBP-USD.

10:31 06/08/2004

Factors get stronger in favor of the U.S. dollar…Rate dynamics and recommendations on EUR-USD and GBP-USD. Oil market stabilization and oil price reduction that resulted in OPEC quota rise reorient players’ attention to FOMC FRS U.S. meeting that is being planned for the end of June. Analysts think that the rate might be raised 25 based points higher, though earlier it was thought that the rate would be raised 50 base points up. According to nonfarm payrolls rise in all the sectors of economy, labor market situation reduces inflationary pressure on the economy. That is why it might turn out that FRS wouldn’t have enough arguments in favor of raising the rate higher. Though, analysts point at macroeconomic signs of inflation. Half year results show that consumer prices rose 4% per year, whereas in the last 2 years the given indicator was on the level of 2%. Low rates and dollar rate decline against the Euro and the yen affected this year’s economic growth. Oil market prices went down. Futures price for Brent make oil made up $35,96 per barrel at London Exchange. At New-York Exchange, futures for Light Sweet Crude make oil made up $38,66 per barrel. FRS rate hike expectations and reduction in prices for oil support the dollar. European currencies are mainly supported by the Bank of England rate hike expectations. The “Old Lady” must pass its decision this Thursday at the regular meeting of Board of Governors. Data on retail sales and consumer spending in Britain made analysts more confident about the rate hike. Confederation of British Industry says that services sector activity rose in the therr last months (March – May). Recommendations: technical picture on EUR and GBP shows that the given currencies has approached the key levels of resistance at 1,23 and 1,84 respectively. Uptrend correction is rather possible. Stay out of the market so far. Recommendations: technical picture on EUR and GBP shows that the given currencies has approached the key levels of resistance at 1,23 and 1,84 respectively. Uptrend correction is rather possible. Stay out of the market so far.

The forecast was created by trans1.