It is definite now: Federal Reserve will not raise the rate

By GG Analyst in Reviews 0 Comment

FRS building

EURUSD

During last week, the pair was going up, coming off slowly from the support line of the wide uptrend channel since last December. If we look to the pair movement through this channel, we can notice that movement in May was indicative (two previous movements took almost the same time) and fast movement from its upper boundary to the lower. However, the probability to break the support of the uptrend channel was quite big.

At least Federal Reserve members were helping it a lot, showing, one after another, that possibility and necessity of a soon policy tightening exists. Still market participants were more…

Federal Reserve is preparing markets for the interest rate increase

By GG Analyst in Reviews 0 Comment

FRS

EURUSD

Last week the Federal Reserve members performed active campaign for changing of market expectations about interest rates. Fed Reserve representatives referred that market volatility calmed down in comparison with the situation in the beginning of the year, while more economic indicators came to the normal levels. Moreover, April FOMC minutes have reflected either that the Committee is seriously considering the rates increase in June. We would like to mention that previous data, possessed by the Committee, were much worse than those noticed during last weeks. Simultaneously, Federal Reserve is observing foreign financial markets cautiously watching out for volatility.

They do not say more…

Sentiments causing a pullback

By GG Analyst in Reviews 0 Comment

EUR/USD

The market’s unwillingness (or inability) to continue purchases of USD is so strong that it contradicts the current macroeconomic background and forces market participants to look for any chance to lock in the profits. Thus, yesterday’s revised statistics on GDP in the third quarter proved to be surprisingly strong. The annualized growth made 3.9% against the preceding rate of 3.5% and the expected downward revision to 3.3%. The growth rate against 3Q of the previous year totaled 2.4%, which speaks about quite an impressive economic growth. Also, it should be noted that the Personal Consumption Index also rose by 2.2%. Earlier more…

USD is growing non-stop

By GG Analyst in Reviews 0 Comment

EUR/USD

Euro-bulls were disappointed. Those, who bet that the ECB’s differences wouldn’t let Draghi continue with policy easing, proved to be wrong. Yes, we also were of that opinion, so a sharp drop of the single currency from the current levels proved to be a kind of surprise to us as we had expected some consolidation near 1.2500. Besides, the US employment data, which initially had passed unnoticed, again exceeded the expectations. The number of weekly unemployment claims had shrunk by the beginning of November to 278k. Moreover, the number of continuing claims decreased dramatically and hit a multi-year low yesterday. In more…

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…