Analysis of the past week - Ester Holdings

Analysis of the past week

Following the results of the outgoing week, market sentiment changed in the opposite direction. Thus, the outgoing week showed multidirectional dynamics against the US dollar, after the steady growth of the American dollar a week earlier. According to the results of the trading week, the US dollar index closes below the opening level against the basket of major competitors  and shows a weekly volatility of about 0.7%.

The fundamental risks of exacerbation of trade confrontation and political risks in the EU and the UK remained the main drivers of the outgoing week. The political risks in the eurozone were centered around the elections to the European Parliament and had a restrained effect on the euro. The final election results are expected on Sunday, May 26, which may cause an increase in euro volatility at the opening of the new trading week.

Political risks in the UK also remain due to the announcement of the date of resignation of British Prime Minister T. May – June 7th. In fact, this news was received by a very cool market. Such a decision saves many of the risk factors associated with Brexit and the implementation of the transaction on it.

Also a high degree of uncertainty persists regarding the US-Chinese trade war. Despite the fact that the United States has postponed the restrictions on the Chinese tech giant Huawei, the risks regarding the escalation of the conflict remain, as indicated by the restrictions on other companies from China and data that China has begun to intensify the armed units, thereby the risks of a cold war USA and China sharply increased.

The US dollar index on saving risks closes the week with a decline, after the update the high at the level of 98.30-40. The American dollar’s decline is limited to support levels of 97.60-50, the update of which will indicate the possibility of a deeper decline to support levels: 97.30 and 97.00.

Fig. The US dollar index H4 chart. The current price is 97.70 (10-year government bonds yield is the blue line)

Hanzenko Anton

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