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4 November Forex daily review

Sergiy Zlyvko
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On Monday the US dollar passed to a correctional phase after the week of growth. The rate of euro/dollar was recovered from a minimum 1.3443 to 1.3524. British pound against dollar became stronger from a minimum 1.5903 to 1.5977.

At the trading in Europe EURUSD rate increase was reserved after mixed European statistics was published as in anticipation of European Central Bank meeting the conversations on interest rate reduction don’t stop. Business activity decreased in the production sector in Italy and France, it grew in Germany and remained at the level of September in the Eurozone. British pound on strong data from Great Britain was recovered by 50 points to 1.5965.

At the trading in New York the pressure upon a dollar exchange rate was put by fall of production orders in the USA in August and September. In August instead of growth by 0.2%, the amount decreased by 0.1% in comparison with July. In September the amount of production orders was 1.7% against the forecast of 1.9%. The statements concerning QE3 were added oil to the fire by J. Bullard. He declared that against low inflation Fed wouldn’t hurry from the beginning of bond purchase program turning.

On the eve of Bank of England and European Central Bank (Thursday) meetings, the participants of the market fixedly keep up the statistics publishing. Today at 9:30 GMT an index of business activity in a service sector in Great Britain for October is going to be published. Decrease of an indicator is expected to 59.8. At 10:00 GMT in the Eurozone the data of production prices for September will be published. At 15:00 GMT the attention will be riveted to service ISM index.

The dollar stopped before new growth. Hour indicators have been unloaded. If on European trading session opening the growth of dollar wouldn’t begin, then correction will be tightened till Thursday and it will be deeper. According to main scenarios, we consider dollar’s return to a yesterday’s maximum.

On Monday the rate of EURUSD was rolled away to 1.3450. Decent rebound turned out, it is undesirable to move above or correction will be tightened till Thursday. According to the main scenario we consider a fall to 1.3463 and tomorrow – updating of a minimum at 1.3443.

British pound on a strong construction index of business activity became stronger to 1.5977. Hourly indicators AO and AC are in a positive zone, columns are red. Sellers need to act from the opening of European session. Index of business activity in service sector in Great Britain for October (9:30 GMT) can create a hindrance. The decrease of an indicator to 59.8 is expected and if it would be better than expected, it is necessary to wait a little with the fall till Thursday or Non-Farm payrolls.

On Monday AUDUSD rate on strong retail sales data in Australia was recovered by 75 points. After RBA meeting, AUDUSD handed over line items. Losses constituted 50 points.

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