A brief surge of optimism

By GG Analyst in Reviews 0 Comment

EUR/USD

A number of vital events have happened in the market since our last review. Firstly, Obama formally gained the upper hand in the fiscal policy issue. The fact that the agreement had been finally reached (now taxes for those who earn more than 450K will be raised) led to opening of the currency and stock markets with an upward gap. S&P 500 returned to October highs, but this is all the bulls could do at the time. Since then the market has been steadily trading sideways and even the employment stats couldn’t change the situation. In the currency market opening with more…

Dying carry-trade

By GG Analyst in Reviews 0 Comment

EUR/USD

The markets are still in dissonance. Yesterday the single currency was appreciating while the US stock exchanges were on the decline. The EU markets were closed and will be back to work only today. The thin pre-holiday currency market was warmed up to the degree that triggered stop-orders. As a result, the daily minimum was set at 1.3180 at the beginning of trades and then with short hitches the pair got to 1.3250. Anyway, the pair didn’t manage to grow higher – instead traders got down to collecting their profits and activity started to gradually subside. This day promises to be more…

Nothing serious, just a pullback after the rally

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the markets finally pulled back. The continuous growth, lasting for almost 8 days, stumbled over a quite expected obstacle yesterday. On the way to consensus Obama and Boehner passed from mutual concessions to mutual threats. The president promised to veto the republicans’ plan for the budget and fiscal policy. We already warned that this was likely to happen. Common sense prompts that a compromise will be eventually reached, however the way to it won’t be smooth. Also most economists consider that for now it will all end with a temporary agreement, which will help to avert the fiscal cliff at more…

Is the Christmas Forex-rally about to start?

By GG Analyst in Reviews 0 Comment

EUR/USD

Don’t be surprised at yesterday’s retracement of the markets. It doesn’t really mean that the further upward move is not possible and that the market is disappointed because Bernanke has proved to be tougher than needed. Yesterday’s move down as well as selling late on Wednesday has just marked taking of profits and rebalancing of positions before the Christmas rally. Yes, we believe that it hasn’t started yet, since the level of 1.3140 hasn’t been passed. The bears have pushed the pair off this level frequently this year. But this time there’s a good chance that the level will be passed more…

Don’t buy into the rumours

By GG Analyst in Reviews 0 Comment

EUR/USD

Almost all the economists surveyed by Bloomberg (48 out of 49) expect expansion of the QE programme. Many believe that this measure will compensate the size of the expiring Operation Twist. It means that the market is now in anticipation of the asset purchase programme being extended from $40bln up to $85bln monthly. This turn of events is quite possible and we spoke about that before (remember our comments after the payrolls), however it has already been built into the rates and therefore is of little interest now. There is one more variant, also worth of considering. A couple of weeks more…