A respite in safe havens

By GG Analyst in Reviews 0 Comment

EUR/USD

The single currency and many other markets experienced a downward correction yesterday. The fact that traders ignored bad news from the euro zone proves that it was just a correction, not the beginning of selling (at least in the euro).The decline started later and was quite moderate. The profit-squeeze drove the pair from 1.34 to 1.3340. This is where trading was closed last week. And this is where the euro came to be this morning after another attempt to break through 1.34. Thus, trading is held in a very narrow channel, so far there haven’t been any serious causes for growing more…

Optimism is growing

By GG Analyst in Reviews 0 Comment

EUR/USD

Last week the markets continued their way up. We expected this outcome not only because of the high demand for risk, which appeared thanks to the major CBs and their money emissions since the third quarter of the previous year. The move was also boosted by the preceding stagnation in the markets. The Forex volatility indicator was minimal in December and the stock market one, VIX, hit its 5yr lows. We’ve had bad experience with such drops of the implied volatility before – over the last 5 years such lulls have ended with a decline. Let’s see if this time the more…

Europe’s awakening

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday’s fluctuations were really impressive. Excluding the yen with the political nature of its rally, the market was squeezed in narrow daily ranges for a long time. It seemed that already nothing could rock that boat. But yesterday the good auction results in Spain were enough to stir up the market. Draghi’s concentration on the economic indicators instead of the financial sector also made its contribution. Now for details. The yield of Spanish 5yr bonds fell down below 4% yesterday in comparison with the peak of 6.46% in July. The bid-to-cover ratio was also at a quite favourable level of 2.07. more…

Europe is weak

By GG Analyst in Reviews 0 Comment

EUR/USD

The beginning of the accounting period seems to be quite reassuring. US aluminium giant Alcoa has posted a better-than-expected profit and expressed moderate optimism that demand will continue to grow in 2013. It has gradually moved the stock market from the middle of the trading range to its upper bound. Turning to Forex, here EU currencies are trailing much behind their counterparts. Yesterday EUR again failed to consolidate above 1.31. The pair had been pushed down before it even got above the mark. Apparently, the euro is being pressurized. It is rumoured that the reason is asset sales by sovereign wealth more…

Is it the end of consolidation?

By GG Analyst in Reviews 0 Comment

Yesterday afternoon the pressure on the single currency grew high. However, it wasn’t strong enough to endanger the support of 1.30. The reason is absolutely unimpressive news on the EU economy. First of all, Germany’s trade surplus is on the decline. The country had a great advantage in the second and third quarters due to depreciating of the euro. But the return of the euro above 1.30 reduced competitiveness of the European goods in the export markets. Also the continuing austerity inside the region keeps putting pressure on the domestic demand. Later the unemployment stats were released. As expected, unemployment hit more…