IAFT Weekly Economic Review

Last week was published a number of statistical data for Germany and the Eurozone. According to these data, business activity in the manufacturing and services sector remains high, but the growth rate of the German economy could not impress the participants of the currency market. In general, their activity remained very low, so any interesting movements in the market was not observed. The key event of the week the speech of FRS Chairman of Janet Yellenwas scheduled for Friday, in anticipation of which no one was in a hurry to open new positions.

In anticipation of the event, the euro gradually decreased against the US dollar. As a result, it has tested support around 1.1245, the pair retraced back to the area of the 13th figure. Meanwhile, the dollar is under pressure from the Japanese yen, but to break through support at the psychological level of 100.00 the bears have failed. British pound on the background of profit-taking on short positions moved higher and tested the resistance at 1.3273.

In his speech, Janet Yellen said about the relevance of the issue to increase the interest rate, but then made it clear that the pace of further tightening of monetary policy will be moderate. Besides, she gave a fairly restrained prognosis in terms of growth of the US economy, and in no way clarified the question of the timing of rate increase. Thus, the dollar initially was growing, then fell, but its drop was used for purchases, which allowed it to finish the week higher against the main competitors. This week, the demand for it continues, the euro, the yen and the pound may continue to fall, at the same time the volatility is still low, which should be considered by IAFT traders. BlogLinks

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IAFT Weekly Economic Review

Pretty boring in terms of movements turned out to be the last week. The main events were the announcement of the results of the meeting of the Committee on Monetary Policy of the Bank of England and the publication of the US labor market data. In anticipation of these events, the US dollar faced pressure from its main competitors, against which the euro has tested resistance at 1.1233, the pound resistance of - 1.3372, and the yen support of — 100.68. Overall, volatility on the currency market remained relatively low, despite a number of important events that have occurred in the recent past, among which are the exit of Great Britain from the EU.

According to the expectations of market participants, the Bank of England decided to lower the interest rate by 0.25%, as well as to expand the volume of asset purchases. At the same time the central bank made a regular decrease of rate by the end of this year and lowered its forecast for the growth rate of the UK economy. As a result, the pound has undergone to sale, collapsed against the US dollar to support in the area of 1.3020. Weekly closing took place slightly above this level, and the continued interest on the sale of a rebound indicates the further risk decline. Long-term prospects for the pound remain negative.

Posted on Wednesday a report on employment in the US private sector from ADP has slightly exceeded the predicted value, but to impress the bulls on the dollar he failed. So from Friday's data on employment in the agricultural sector is not expected any surprises, so the released index at the level of 255 thousand of jobs against the forecasted of 180 thousand. Was a pleasant surprise for them, on what the dollar reacted by rising against major competitors. As a result, the euro/dollar fell to 1.1046, and the dollar/yen rose to 102.06. This week, the dollar can keep a positive attitude, but market activity may remain low, which should be considered by the IAFT traders. BlogLinks

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IAFT Weekly Economic Review

The most anticipated events of the last week was the meeting of the two central banks - the US Federal Reserve and Bank of Japan. In anticipation of these events, the currency market was in a very sleepy state, against what the major currency pairs traded mostly in the range. Euro pairing with the USD tested the resistance at 1.1029 and then stood for a while near the psychological level of 1.1000. The British pound also tried to movebut its recovery against the dollar was limited by resistance of 1.3248. Brexit and expectations of the Bank of England to reduce the interest rate will not let him to develop of a more large-scale correction.

The Japanese yen traded in different directions. At first, it grew against the dollar, but after testing support in the area of the 104th figure rose to 106.54. Comments of Japanese prime minister have raised expectations of expansion by the Bank of Japan of stimulus measures that put pressure on the yen. Following the results of the meeting, the Bank of Japan increased volume purchase program ETF, but left the interest rate and the monthly volumes of quantitative easing unchanged.Thus, his actions were not as radical as market participants were expecting, that returned appetite for purchases of the yen. As a result, it has completed the week higher against many of its competitors, and its prospects now look more constructive.

Federal Committee Operations on the US FRS open market decided to leave interest rate unchanged. Overall, this decision was expected, but in his comments, despite the cautious optimism regarding the prospects for the US economy, the FRS has made it clear that the rush with the rate increase is still not, on what, the markets reacted by the moderate sales are of the US dollar.On this background the euro in tandem with it closed the week at the resistance area of 1.1180, and this in somewat improves the technical perspective. However, the fundamentals do not give a good reason for purchases of the single currency, so a significant increase over the 12th figure seems unlikely, that should be considered by the IAFT traders. BlogLinks

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