Forex Club: optimism leaves the markets
The US dollar has been trading in different directions over the past week due to the lack of significant macroeconomic events and statistical reports. The euro felt more confident in the week than other currencies, which behaved much more modestly. But market optimism is gradually beginning to fade.
The results of the week disappointed investors – none of the events that had high hopes justified itself. The ECB has completely denied rumors about limiting the growth of peripheral bond yields, and officials could not give clear comments on the future fate of Greece. EUR / USD completed trading at 1.2512, while GBP / USD – at 1.5802.
As for the dollar, in the absence of important events and in anticipation of the publication of the minutes of the last meeting of the US Federal Open Market Committee (FOMC), it gradually increased from Monday to Wednesday. According to the Forex Club, “market participants, impressed by recent macroeconomic statistics, have expected committee members to be more optimistic about their immediate prospects for economic growth than a month earlier. However, the” minutes “turned out to be quite negative. “which gave reason to believe that QE3 is just around the corner. Accordingly, the dollar fell under pressure, and the USDX index dipped 1.8% from weekly highs.”
Analyst Valery Polkhovsky explained that against this background, the European currency felt very confident. Against the backdrop of discussions about possible interventions by the ECB on the bond market of the governments of Spain and Italy, the EUR / USD pair added about 250 basis points or 2.0%. But Friday did not bring any surprises: German Chancellor Angela Merkel met with Samaras, refused to make a decision before a report from Troika appeared, and confirmed the need to fulfill the agreed obligations. “As a result, EUR / USD opened the day at 1.2563, noted a minimum of 1.2481 and rolled back to 1.2512 by the time of closing,” said expert Alena Afanasyeva.
The new week will not bring significant macroeconomic statistics that can have a significant impact on the position of the dollar. Bernanke’s speech at the economic symposium on August 31 may be the focus of the attention of the participants in the foreign exchange market. It is possible that the data on consumer confidence from Conference Board can traditionally be strongly perceived by the stock markets, and therefore can have an indirect effect on the US currency.
“On August 27, bidders for the EUR / USD pair will focus on data on the state of the business climate in Germany from the Ifo Economic Research Center. . Some improvement in the state of the business climate may. It is also quite possible to move the euro to 1.2720. From the point of view of technical analysis, it makes sense to consider buying purchases only after breaking through support of 1.2365, ”the company’s report says.
According to the Forex Club forecast, at the beginning of the week GBP / USD may show attempts to break through 1.59 (hardly successful), then with the approach of Friday the pair may come under pressure. On the way there will be the following support levels of 1.58, 1.5780 and 1.5660.
“This week promises a large number of economic reports from Japan: Bank of Japan economic report, retail sales, labor market, inflation, consumer spending. Nevertheless, we all know that for a long time JPY does not pay special attention to events in the national economy. Bernanke’s speech will be of much greater interest. Pending confirmation of the course on QE3, the pair may break through the support of 78.50 and rush to the area of 78.00 with a further target of 77.60, which we have not seen since June of this year.
No interesting reports are planned for AUD / USD, however we can continue to observe the pair’s weakness, taking into account the recent comments of RBA head Stevens. The economy does not benefit at all from the growth of the national currency, which only complicates the life of exporters even in such unstable times. The pair may approach 1.0340 with a further target at 1.0300, ”says Afanasyeva.