Posts from: May 2012

Forecast for the week 28.05.2012 – 01.06.2012

The main events of the week May 28th – June 1st, which may have a significant impact on the Dollar’s positions, will be the publications of the regular reports for May on the labor market from the U.S. Bureau of Labor Statistics (June 1st) and on PMI from the Institute for Supply Management (June 1st). The April data disappointed investors and triggered sales on the stock markets and the strengthening of the Dollar, increased by a new round of the debt crisis in the Eurozone due to the political events in Greece and France. However, participants can ignore this data. We believe that next week, the Dollar has the potential to continue rising against all of its competitors, except the Japanese yen.

The European currency will not be able to get any support from the macroeconomic statistics due to the absence of significant releases in the economic calendar. However, the situation is so tense around Greece that it can explode at any moment. A high uncertainty level will continue to put pressure on the quotes of the EUR/USD pair. We believe that within a week it has a good chance to test a technically important level of 1.2320.

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Review of the trading week 21.05.2012 – 25.05.2012

The Dollar continued its rally relative to its competitors in the period from May 21st to May 25th. The USDX Dollar Index has achieved the maximum values since September 2010 in the area of 82.440. In comparison with the closing of last week it is adding 1.5%. The main driver of the movement still remains the situation around Greece and its potential exit from the Eurozone. Investors’ attention is now so focused on the situation in Europe that the macroeconomic statistics receded.

The EUR/USD pair continued to remain under pressure and in the late afternoon of May 25th reached the 1.2500 mark. The situation remains tense and up to the additional elections in mid-June, is unlikely to change significantly, providing a place for the Euro’s fall.

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Forecast for the week 21.05.2012 – 25.05.2012

The main event of the week May 21st-25th, that will be able to significantly influence the dynamics of the U.S. Dollar, will  be the data release on the new orders for durable goods ( May 24th). Traditionally, this report is ignored by the currency market’s participants, but it can provoke intense movements on the U.S. stock exchanges an hour later, which will affect the positions of the Dollar. Nevertheless, no matter how positive or negative the “surprise” will be, it will not be able to draw out of attention a new round of debt crisis in the Eurozone, triggered by the growing political uncertainty in some of its member countries. The Dollar has good chances to strengthen its positions in the upcoming week.

The European currency will remain under pressure. The only report that can provide it some support may be the data on the Index of Business Environment from the Center for Economic Research Ifo (May 24th). However, taking into account the fact that this indicator belongs to business optimism indexes, as well as the fact that the level of political uncertainty has been significantly increased in recent weeks, one should not expect any considerable positive changes. The EUR/USD pair will continue its movement towards the mark of 1.25-1.26.

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