Daily Market Review 5 of October
OVERVIEW

The Euro prices have passed some correction which was seen after publishing of the FOMC protocol. During current trading day the currency appreciated against the Dollar. It is a consequence of the statement of the head of the ECB who said that central bank is ready to start the program of purchasing bonds in order to reduce profitability of bonds of problematic countries. The details of the plan were not revealed. In addition the incremental support to the Euro was the results of Spanish auction of bonds with maturity in 2014, 2015 and 2017. Spain has managed to sell debts of 4 billion Euros in total. The profitability though turned out to be lower than by the results of the previous one. Further perspectives of the Euro are unclear. Perhaps the plan of Mario Draghi will be a Trojan horse. Meanwhile as a result of positive factors the currency has a demand and is actively purchased. But for further growth it needs something more than the support of Spanish bonds’ sales and the ECB plans.

CURRENCIES

EUR/USD


Yesterday the Euro appreciated against the US Dollar from 1.2907 to 1.3031. It is assumed that if the demand for risky assets remains the growth will continue. Sales of Spanish debts are already a matter of the past. The currency already needs new positive factors to continue ascending.  The strong resistance is still near 1.3171. If the factors triggering growth disappear all of a sudden then the long positions will start to close.



GBP/USD

Yesterday the Pound grew against the US Dollar from 1.6075 to 1.6201. The decision of the Bank of England to leave the rates unchanged had a positive impact on the national currency. The only question is about timing of that growth. Apparently after weakening of the demand for risky assets the Currency will get under sales’ pressure. The resistance is at 1.6235. The support is near 1.6040.