IAFT Weekly Economic Review

Termination of the UK's membership in the European Union and the consequences of this event are temporarily took a back seat, as investors' attention has shifted to a possible extension by the Bank of Japan of stimulating measures. Thus the British pound held next another week is holding on from further decline against the US dollar, trading above the psychological level of 1.3000. Published data on the labor market of the United Kingdom have shown employment growth and falling unemployment rate, which was able to support it, but it did not contribute to the growth of above 33rd figure. Bears can again test the level of 1.3000.

Expectations of action by the Japanese central bank forced investors to get rid of long positions in the yen, against which it was trading mostly with a negative attitude in tandem with the US dollar and in the crosses with other currencies. As a result of growth against the yen, dollar reached resistance in the area of 107.50, which, along with the break of a number of levels allows us to speak about situation improvement in the pair. However, the Bank of Japan may again disappoint bears on the yen, refraining from any actions, that may well bring her back into the mainstream of the uptrend.

Last week, was held a meeting of the European Central Bank. Its decision to leave the interest rate and the volume of asset purchases unchanged was expected, so any special reaction to the event was not followed. President of the bank of Mario Draghi at the press conference is also did not give a reason for the active sales or purchases of the euro, which in tandem with the dollar continued to trade after the event within the psychological level of 1.1000. But, under the influence of other factors, the euro on Friday broke through this level and finished the week down to support of 1.0955. Its prospects remain negative, the next bears can test the support of 08 th figure, that should be considered by the IAFT traders. BlogLinks

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IAFT Weekly Economic Review

Last week by the Bank of Canada and the Bank of England were condacted the meetings on monetary policy. Some analysts are expected that both of the Central Banks will lower level of interest rate, but here they were disappointed, because neither of them did not make any changes to monetary policy. If the Bank of Canada's decision in general was not a surprise, although it caused a strengthening of the Canadian dollar, the Bank of England's passivity after the comments of its chief Mark Carney was a surprise.

Whatever it is, the British pound, thanks to this, was able to keep a positive attitude and to test in a pair with the US dollar resistance at 1.3480. However, on the background of the termination of the United Kingdom of membership of the European Union and the possible consequences of this event, expect from the pound stable positive dynamics is not necessary, and its growth continue to be used for sales. Thus his prospects remain negative, and its decline back to the 28th figure is still quite real.

Since Brexit consequences can be negative for the EU, the negative look and the prospects for the single European currency. Undoubtedly, the failed attempt of military coup in Turkey in no way contributes to the strengthening of its positions, as well as the threat of a banking crisis in Italy. In these circumstances, attempts of euro to restore against the dollar is still used to open short positions, and at this point it is difficult to find a good reason for his purchases, IAFT traders we recommend to be cautious. BlogLinks

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IAFT Weekly Economic Review

Last week was quite calm. In the absence of fresh drivers, and in anticipation of important data on employment and unemployment in the US, the major currency pairs was trading mostly in the range. The euro was under pressure from the US dollar, went down by end of the week to support in the area of the psychological level of 1.1000. Many analysts agree that the exit of Great Britain from the European Union will have negative consequences for the Eurozone, which determines the attitude of the single currency.

There is no doubt, that nothing good assumes the Brekzit for Great Britain itself. This event provoked a strong drop in the British pound right after occurrences of preliminary results of the referendum, and the decline continued last week, as a result the pound together with the US dollar has tested support at 1.2796. Under the conditions of overselling of pound, the bears failed to move below this level, but the bulls failed rise above 1.3047 as well. Long-term prospects for the British remain negative.

The main event of the last week, of course, was the publication of the employment report in the US non-agricultural sector. From these data, investors are not expecting any surprises, so unexpected increase of employment up to 287 ths. jobs, has caused a strong reaction of the market players, but it was short-lived. Growth of employment and unemployment at the level of 4.9% caused a strengthening of the US dollar against many competitors, which allowed it to finish the week on a positive note. Thus the demand for it may well continue this week, although market activity may remain low, IAFT traders should be cautious.BlogLinks

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IAFT Weekly Economic Review

According to published last week data, economic growth in the first quarter of the USA reached 1.1%, exceeding, thus, predictive and previous values. However, these data were able to impress investors, especially that consumer spending remain low, as well as personal income. In general, these data had little impact on the dynamics of the US dollar, which last week was under slight pressure from the euro and the Japanese yen.

After the referendum in the UK, as a result of which, the country will not to be a member of the European Union, a further tightening of monetary policy by the US Federal Reserve was under a big question. The head of the Federal Reserve Janet Yellen in her comments confirmed the absence of haste in raising interest rate, which is also lowered expectations of market participants regarding the event. Thus enthusiasm for dollar purchases, in particular for euro, despite the Brexit, is not there, but at this moment, euro/dollar is in a consolidation phase, and the prospects for the pair remain negative.

While the euro gets some support thanks to the current account surplus, the British Pound prospects look much gloomier. Although the British actively protest against the country's exit from the EU, the chance to cancel the results of the referendum are quite low. Moreover, in his comments the head of the Bank of England has admitted lowering of interest rate in the foreseeable future.On the background of these factors, the pound will continue to decline, but IAFT traders should closely monitor what is happening in the UK, since politicians can still find ways to save the country's membership in the EU, and then we will see a large-scale getting rid of short positions in the pound. BlogLinks

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