Fed ended QE without scruple

By GG Analyst in Reviews 0 Comment

EUR/USD

The Federal Reserve finally put an end to bond purchasing, as had been mentioned in the earlier plans of the Committee. It was feared that the Fed would soften its stance in view of the inflation which proved to be weaker than expected and of the recent sharp decline of the stock markets. Instead of this the Committee focused on the favourable data on employment and also on consumer and business spending, explaining that these trends can become a reason for inflation acceleration. Logic is simple here. Lower unemployment increases competition between employers, which results into acceleration of earnings growth and more…

USD makes a step back before FOMC’s meeting

By GG Analyst in Reviews 0 Comment

EUR/USD

The Ifo Business Climate Index dropped in October more than expected. The general index fell from 104.7 to 103.2, while only 104.6 had been expected. The Ifo Current Assessment and Expectations again declined simultaneously, to 108.4 and 98.3 from 110.5 and 99.3 respectively. The current rates are the lowest since the end of 2012. Investors tend to believe that in the second half of the year Germany will fall into technical recession, i.e. will suffer reduction of the GDP for at least two quarters in a row. Yet, it should be taken into account that the country has the strong beginning more…

Cautious optimism to follow the stress tests

By GG Analyst in Reviews 0 Comment

EUR/USD

25 EU banks failed the ECB’s stress tests, carried out at the end of the previous year. The regulator, anyway, notes that over that time the banks have improved their financial health. The Italian banks are in the worst position – there 9 banks failed the ECB’s checks and 2 banks need to build up the capital. Altogether the banks have to increase the capital by €25bln, half of which has already been gained by the banks by now. Though the results didn’t show a sudden improvement of the banking system, market observers and participants took the results with cautious optimism more…

The flat end of the week

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency would have had a hard time, if the German PMI hadn’t come to the rescue. The preliminary French PMI, published half an hour before, intensified pressure on the euro due to the decrease in the Manufacturing and Services PMIs. The former fell from 48.8 right down to 47.3 against the expected 48.6 and the latter – from 48.4 to 48.1 against the expected 48.2. The French economy keeps slowing down. The Composite PMI in the meantime dipped down to 48.0, which hasn’t been seen since last February. The pair managed to stay above 1.26 (the low was more…

1.2600 as a crucial correction level

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency is still being attacked by bears. These traders have decided to take advantage of the moment and sell the euro at a higher price due to the previous correction. Besides, as has already been mentioned, in the periods of such surface lull, trading volumes are quite handsome, which enables players to store liquidity for a serious attack. Unfortunately, it is hard to understand which stance big players will take. Now it seems that the euro’s correction is coming to its end and the pair will soon reach fresh highs since the beginning of October (below 1.2500). Now trading more…