20.07.2016 - Technical view

Currency trading and the euro. Price of euro fell against the dollar after the publication of weak statistics on the index of business sentiment in the Eurozone from the ZEW, which in July fell to 14.7, against 20.2 in June. In addition, the US dollar strengthened after the release of strong statistics on the housing market in the country, where the number of housing starts rose to 1.19 million vs. expected 1.17 million. Today, it is worth paying attention to the data on the balance of payments of the Eurozone (08:00 GMT) and the index of consumer confidence in the Eurozone (14:00 GMT). Investors are waiting for tomorrow's ECB decision on interest rates, and a press conference by Mario Draghi. We do not expect the easing of monetary policy in the euro area tomorrow, but we expect a further decline in the euro in the medium term.

Currency trading and the British pound. The price of the British pound fell after the US dollar rose against the background of positive data on house construction in the United States. Today, the focus will be on the labor market statistics in the UK (08:30 GMT), which has not yet had time to respond to the results of the referendum at which voted in favor of the UK’s exit from the EU. According to our estimates, the British currency decline will continue in the near future and medium term, and growth is possible only within the correction.

Currency trading and the Japanese yen. The price of the Japanese yen continued to consolidate and could not be reduced despite the positive dynamics of the US dollar. Investors continue to follow the statements of local officials, which may ease monetary policy in the country. Tomorrow will be published statistics on the index of business activity in Japan. The demand for defensive assets remains high due to the uncertainty regarding the future growth prospects of the US markets, as well as concerns about the consequences of UK’s exit from the EU. Our medium-term outlook for the yen remains negative, but in the near future we may see renewed growth.

Currency trading and the Australian dollar. The price of the Australian dollar has stabilized after the recent decline, but after the completion of the consolidation can resume a negative trend. Today was published weak statistics on the index of leading economic indicators in May, which fell by 0.2% against growth of 0.2% in the previous period. Tomorrow we should pay attention to the index of sentiment in the business circles of Australia. We forecast a drop in the Australian dollar in the medium term and the dynamics of trading in the near future will be strongly affected by commodities prices.

Currency trading and the New Zealand dollar. The price of the New Zealand dollar has stabilized after a sharp decline the previous days. It should be noted that the potential for further decline decreased and the probability of upward correction has increased significantly. The dynamics of prices are influenced by external factors such as the dynamics of the Australian and US dollars, as well as commodity prices. Our medium-term outlook remains negative, but we do not exclude the correction in the near future.

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