Nothing fundamental, just techniques

By GG Analyst in Reviews 0 Comment

EUR/USD

Mr. Draghi is surely a more prominent figure than Ewald Nowotny. This is why his performance produced such a strong reaction in the market yesterday. And though the slope towards sales in the euro was really sharp, we didn’t expect that fixing of ‘shorts’ would run without even the slightest attempt to fight for an important psychological level of 1.20. We believe that yesterday’s growth of the euro up to 1.2320 after Draghi’s commentary was technical rather than caused by a sharp change in the market sentiment. The ECB’s head said that the Bank would do its best to protect the more…

USD again gains strength on bad news from the USA

By GG Analyst in Reviews 0 Comment

EUR/USD

The negative sentiments in regard to the USA can cause both decrease and increase in the dollar. It depends just on how much bad news is released. If there isn’t much negative, the CB and the government are expected to handle this by making monetary or fiscal policy less tough. However, if the market believes that the slowdown will spread to other economies and require more money infusions (meaning that it will lead to the increase in the deficit budget), the negative news from the USA can be of benefit to the dollar. The market simply considers that in other countries more…

ECB’s and Fed’s members keep up risk demand

By GG Analyst in Reviews 0 Comment

EUR/USD

It is not the first time when at the beginning of Draghi’s conference the markets mainly sell the euro, but eventually switch over to buying of the currency. First Draghi pointed to the fact that the forecasts for the second quarter had changed for the worse. Yet he didn’t suggest anything new to maintain confidence in the suffering banking system. It surely disappointed the markets, though later they tempered justice with mercy on the news that the Bank would continue to hold 3-month auctions to supply unlimited liquidity. Besides, it is prepared to do that as long as needed, another year more…

Hope dwindles

By GG Analyst in Reviews 0 Comment

EUR/USD

As seen from yesterday’s rates, hopes that Spain would do without help of the EU were gradually melting away throughout the day. The pair neither bounced on bad news nor flew on an avalanche of triggering stop-orders. However, having started the day from 1.25, the euro/dollar closed it at 1.2370. Again it becomes evident that the single currency suffers the heaviest pressure at trading in America, while sessions in Asia and Europe go on by far more quietly. Yet, even then we don’t observe any significant corrections in the pair. The weak Italian auction with a low bid-to-cover ratio of 1.4 more…

Even Dove Draghi turns into Hawk Draghi with time

By GG Analyst in Reviews 0 Comment

EUR/USD

Mario Draghi started yesterday’s press-conference with quite an unexpected statement pointing to the low possibility of further rate cut or another LTRO. It is a really surprising stance, especially at the time when the European countries one after another slide into recession. Apparently, the atmosphere in the ECB is such that no matter how peace-loving the ECB’s head is he will eventually turn into a hawk. Of course, it wasn’t without the heavy pressure from Germany, all the ruling top of which reacted nervously to the latest actions of the ECB in regard to long money and easing of collateral requirements. more…