Analytic reviews

USDCHF dropped to 0,8850 on Monday. 5^th day in a row it crossed the level of 0,8876 (Fibonacci 78,6% level), but does not close below it. We believe that as long as this level holds, pair recovery is quite possible, but only the increase above 0,8964 will decrease the pressure.

Recommendations: We buy the pair in case of a breakthrough and clear fixation above the strong intermediate resistance level of 0,8910 with small stakes and we increase the stakes in case the pair goes above 0,8965 with the short-term aim of 0,9020 and a long-term goal of 0,9080

Andrey Batensky ​

During the European session Chinese Yuan dropped to six-month minimum against USD continuing  rapid decrease from the last week. We believe that People’s Republic Bank of China is trying to open  specific expectations regarding positioning and stop the inflow of speculative capital. If to speak about the other markets, Ukraine hryvnia keeps decreasing due to expectations that it will be devaluated after the deal with WMF. No big changes in USDJPY, because investors expected further orients regarding US economic growth after unstable recent US data.

Andrei Batensky​

ECB can go for stimulus increase

EUR keeps consolidating awaiting the meeting of ECB which will be held on March 6^th. Statistics regarding retail inflation yesterday showed that that it did not increase as well as inflation for producers, which was published last week and stopped the further increase of European currency even though there were a lot weak statistics from the US. Rapid decrease of general retail index for 1,7% increases the probability that Mario Draghi will announce about new stimulating measures in order to prevent Euro Zone facing deflation trap like Japan had at the end of the last century.

Euro currency will rapidly decrease against all the major currencies if ECB goes for it. But by now it is most likely that EURUSD will be traded at 1,3700-70.

Semen Kamensky​

Most likely Bank of Japan will face the “critical moment” in taking the decision about the necessity of further monetary policy mitigation in May. This news was announced by the adviser of prime-minister of Japan on Monday. Basically, he made it clear that the government will be waiting for further actions from Bank of Japan after the sales tax increase in April. According to Honda, when taking a decision regarding the strategy, Bank of Japan most likely will be emphasizing economic indicators like stock prices, exchange rates, inflation expectations and CPI. Comments by Honda were said one week after Bank of Japan announced about doubling measures which stimulate lending. It was veryl unexpectful for investors and cause a rapid growth on Tokyo stock market.

Andrey Batensky​

All attention on European and German statistics today.

Quite weak data regarding US economy which is as they say due to cold winter in North America continue to have a negative impact on USD. All the factors make it impossible for US dollar to start rapidly growing against EUR. At the same time we are not sure that EUR will be under pressure after the new portion of German and European statistics regarding inflation will be published and if it is at least not worse than expected then EUR has all chanced to hit the local maximum. At the same time, if statistics is worse than expected it will definitely lead EUR decrease from 1,3685-1,3770 to 1,3660.

It can be caused by speculations that already on the next ECB meeting Mario Draghi will announce new measures to stabilize the economy of Euro Zone. Even though it is quite unlikely, but speculations can have quite strong impact on EUR.

Semen Kamensky

On the last weekend ECB president Mario Draghi announced in Sydney that the next ECB meeting which is supposed to take place next week will be vital. Most likely he is right. According to the latest data Euro Zone CPI has dropped by 1,1% (prediction 0,8%) compared to the last month. Looks like it is getting much harder for Draghi to avoid further monetary policy mitigation. 

Recommendation: we buy EURUSD in case of a breakthrough and clear fixation above the strong intermediate resistance level of 1,3830 with small stakes and we increase our stakes if the price goes above 1,3900 with the first goal of 1,4000 and the second of 1,4250

Andrey Batensky​

Euro can get under pressure today

Latest data about European GDP supported Euro currency as it decreased the danger of deflation and thanks to ECB forecast regarding inflation growth continuation in the next several days to 2,0% EURUSD is being traded at 1,3700. But even though there are lots of positive signs today EUR can get under pressure if weak data from ZEW are published today. According to the latest German statistics it is possible to predict that statistics by ZEW will be weaker than the prediction. If it really happens then EURUSD will decrease below the level of 1,3700 and can test the level of 1,3630 which equals to Fibonacci 38%.

Technically it is quite possible due to pair overbought. At the same time, in case of weak data from Great Britain it can lead to GBPUSD correction.

Semen Kamensky​

Euro can reach its maximum against USD if it manages to stay above one important support level on day graph. If EURUSD is above Ichimoku Cloud support level (1.3690) by the end of the day then it is very likely that there will be a further growth. If this technical support remains then increasing Bollinger Bands on the day-graph can be considered  as another positive indicator. These two bullish technical signals can cause EURUSD increase above maximum of 1.3739 (January 24^th) and maximum of Bollinger Bands of 1.3831 on the week-graph.

Recommendation: we open long position if the level is breached and there is a clear fixation above the strong intermediate resistance level of 1.3690 with small stakes and we increase our stakes in case the level of 1.3740 is breached with a short-term aim of 1.3820 and with a long-term goal of 1.3900.

Andrey Batensky​

US dollar decreased compared to other major currencies on Monday and has hit 4-year minimum against British Pound because US economic indicators continue to signal that US economy recovery is still slowing down. According to US statistics published on Friday the volume of production in manufacturing industry decreased in January and that is another sign of slow start of the year. US published weak statistics after Great Britain announced positive signs of economy recovery. According to the last quarter-report Central Bank of Great Britain expect low rate of inflation and high economy growth. The forecast for GDP growth has been updated and now it is expected to be 3,4% against 2,8%.

Andrey Batenskiy​

Holiday in the United States of America and lack of activity in the market

Previous week was not positive for US dollar due to weak Initial Jobless Claims and Retail Sales statistics. But the general decrease was not that strong as Michigan Consumer Index remained at the same level of 81,2. Janet Yellen in her speech to US Bank Congress Committee confirmed that Federal Reserve will continue to reduce mortgage obligations buyout smoothly. What is more, she pointed out that weak statistics is due to extremely cold and snowy winter in North America.

By now there is a very low dynamics in the market and we believe it will remain the same for the whole day because of lack of new statistics from the US and because of the holiday in the United States of America (President’s Day)

Semen Kamensky​