Emotions are welling up the market…Rate dynamics and recommendations on EUR-USD and GBP-USD. by OpenForex.com

Emotions are welling up the market…Rate dynamics and recommendations on EUR-USD and GBP-USD.

13:26 06/22/2004

Emotions are welling up the market…Rate dynamics and recommendations on EUR-USD and GBP-USD. Political factor has once again brought in corrections in exchange market forces. Explosions in Ankara and tensions in Istanbul resulted in emotional splash and run away from the dollar at yesterday’s session. Though, not only political events were the reasons of Euro strengthening against the dollar. According to “Insee” Institute of National Statistics, economic advance data exceeds the figures of official statistics that shows 1,7% compared to 2,3% last year. The given source also says that investments are forecasted to rise 3,8% compared to the previous year. For the first time in the last years, the given indicator was positive, which means that production grows and attracts investors. Institute analysts assure that rise in prices for oil and inflation would not significantly influence world economic expansion. Unemployment - the main headache for France- remains under control and its rate has not changed since January 2004, staying on the level of 9,8%. Another factor that puts pressure on the dollar is rise in prices for oil, conditioned by strike in Norway. The conflict between oil-extractors’ trade unions and National Association of Oil Industry continues. In response to trade unions, National Association locked out. Everyday oil extraction is 370K barrels less now, trade unions are threatened to lose 715K barrels every day. Let us remind that Norway is the third largest oil-extracting country in the world after Saudi Arabia and Russia. Everyone hopes Norwegian government will interfere soon. However, the Euro is though to be a bit emotional and players are trying to play out dollar losses on exchange market. New home sales in the U.S. in May made up 1369000 (forecasted 1130000, previous value equaled 1093000). The outcome was higher than forecasted and reached record level. Its previous value was revised aside increase. New home sales turned out to be maximal since the year 1993. Investors were a bit disappointed by jobless claims in the U.S. in the week ended June 19. The indicator came out as 349000 (forecasted 339000, previous value equaled 336000). The outcome was worse than forecasted. Help-wanted index in the U.S. in May made up 39 (forecasted 40, previous value equaled 38). Today, we are expecting final value of Michigan sentiments index for June, forecasted 95,2. In case data is better than forecasted, the dollar is expected to strengthen. If the outcome is lower than forecasted, the situation will remain indefinite. Recommendations: keep long-term shorts on Euro, as well as on pound sterling. Don’t forget about protective stops. Recommendations: keep long-term shorts on Euro, as well as on pound sterling. Don’t forget about protective stops.

The forecast was created by trans1.