Market is under A. Greenspan’s influence…Rate dynamics and recommendations on EUR-USD and GBP-USD. by OpenForex.com

Market is under A. Greenspan’s influence…Rate dynamics and recommendations on EUR-USD and GBP-USD.

08:37 06/14/2004

Market is under A. Greenspan’s influence…Rate dynamics and recommendations on EUR-USD and GBP-USD. On Friday, financial markets were closed in the U.S., however the dollar started strengthening at the beginning of the European session. The rate of the pound sterling rose steeply after A. Greenspan’s speech at the Senate, when he confirmed his own statements expressed first in London on Tuesday. Players had been expecting rate hikes to take place in two banks - the Bank of England and FRS. The given expectations had been counter-balancing GBP-USD position the previous week. Resolute position of FRS in terms of taking measures protecting economy from overheating overweighed the situation in favor of the U.S. dollar. Analysts assume that the rate of refinancing might be raised 50 base points against the presupposed 25 points. The dollar was getting stronger despite slight oil futures rise caused by closing out short positions at London IPE exchange. That was oil traders’ answer to raising the International Energy Agency’s forecast estimate of world demand for oil for the year 2004. June IPE report raised the 2004 forecast on world demand for oil from 80,6 million barrels per day, forecasted in May, to 81,1 million barrels per day. The forecast on rise of the world demand for oil increased from 1,95 million barrels per day to 2,3 million barrels per day in 2004. High demand for oil had been also recorded in China. Europe’s fundamental data release negatively affected the rates of the European currencies against the dollar. In Eurozone, proficit of current operations account of payments balance dropped to 7.0 billion Euro in the first quarter from 8.4 billion Euro a year earlier. That is preliminary data that was published today by Eurostat statistical services. Services trading proficit reduced to 3.3 billion Euro in the first quarter from 6.1 billion Euro a year earlier. In the IV quarter of 2003, proficit of current operations account of payments balance equaled 15.0 billion Euro. Earlier, proficit was said to equal 18.5 billion Euro in the IV quarter. Recommendations: on EUR – we’ve reached the key level of support at 1,2; alligator lines and rising trend line had been broken out. Bear sentiments remain. Prices had reached its first target at 1,2010 on EUR-USD, having recorded 140 points profit. On GBP – the situation is similar. Prices had reached its first target at 1,8185, having recorded 115 points profit. Pay attention at the level of support at 1,798, as strong correction of descending trend might take place from here. Keep shorts on both currency pairs, arranging stops at break-even. Recommendations: on EUR – we’ve reached the key level of support at 1,2; alligator lines and rising trend line had been broken out. Bear sentiments remain. Prices had reached its first target at 1,2010 on EUR-USD, having recorded 140 points profit. On GBP – the situation is similar. Prices had reached its first target at 1,8185, having recorded 115 points profit. Pay attention at the level of support at 1,798, as strong correction of descending trend might take place from here. Keep shorts on both currency pairs, arranging stops at break-even.

The forecast was created by trans1.