GBPUSD, EURUSD. The forecast for upcoming week.
So another trading week is ended. Based on the results of which the major currencies' quotations almost unchanged, and in general by results of the whole week nothing happened. Finally, we waited until the second target for 1,3850 and could fixed the profit. The released economic statistics had no impact on trading session at all, except Thursday, when the Bank of England left the key interest rate at the unchanged level during its meeting which refreshed trades and led to a short — term and explosion of the pound. The main market engine was market participants' sentiments according the further recovery prospects last week. Investors' concerns about the recovery of world economy again appeared on the first place, so since the very beginning of the trading week after the weekends the mass participants exit of risky deals was felt. Remind you that it started a week ago, after publication of disappointed data on American unemployment rate, and a weak economic statistics as a whole. The G8 summit did not yield at all. We only can hear statements about new world currency creating, but when comes to action then all talks will disappear. As results, the summit did not increase the confidence to market participants and left them all in uncertain situation. Currently, the investors unwillingness to risk will be prevalent on the coming week and will have an enormous influence on more risky currencies, as «currency — dens» will have higher demand. You simply have to look at the diagram of the U. S. dollar — yen to understand everything.
The pair broke through this range, which had been in evidence for 95 days, moreover that the pair broke through rather strong support level of 94,50 in favor of choosing safe investments. Probably, it will drop the curtain to all doubts and become the starting point of new dollar's growth as «currency — den». Speaking about the other diagrams with the dollar, the situation is rather two — way. The figures of trend continuation — the flag and pennant — are drawing from the technical point of view on the diagram of the Euro — pound.
They are red lines on the diagram. The targets of these figures are rather high. It is the zone 1,75 for the pound and the zone 1,47 for the Euro, I did not sum it up, but the maximum pace shows to these zones. If did not take into account this figure on the Euro's diagram, then you could become attached to the red triangle (which came into the current figure of trend continuation), within the framework of which the price is held now. The breaking through of its upper of low border will probably refer to the further pair's movement, if the market situation does not clarify by that time. I am still a little bit confused by the MACD position on these two diagrams. More specifically, that it is getting closer to the null zone. As soon as the indicator gets this zone, it will go to any side from it, both upward and downward. Consequently, the pound and Euro trends will go after it. Now this indicator is in the position 50/50. As a result, the technical picture says about a possible increasing at the diagram. But the logical picture suggests otherwise, the pessimistic sentiment at the market enhances all my logical ideas, and not only mine. In general, concerning the diagrams, I like their downward motion more, than upward.
Therefore, I more like to be inclined to the pair's reduce under the level of 1,3750. Will see it, who is right in the end, diagrams or common sense. On the coming week American Banks and companies will announce for the second quarter, I think, the results of these reports will set the pace at the market. If they accounted well, there will be a lot of positive movement at the market and we will see the growth of high — yielding currencies against the dollar, but if the reports are bad, then it will become the catalyst for mass purchases of the dollar. Moreover, the week will be full of different important American data and inflation facts from all regions, also there will be labor market statistics of Great Britain. Speaking about the tactics of the trades for the coming week, my opinion is written above, concerning the trades you should use the strategy of trading over the range. The upper limits are 1,4080 — the high bound of the triangle, 1,4100 and 1,4200. Any of these zones are a correct point for selling the Euro. Take the targets approximately in the middle of the range, 1,3950 and 1,3890. I won't consider the below purchases.
Have a good week!
July, 12, 2009.
Alexey Goncharov.
