The history of the most developed financial market in the world – the U.S. market, has shown that there are certain indicators, which are likely to define the direction of the market.
In which way these indicators determine the movement of the market?
The petrol price is a significant factor for the market direction. When the global economy recovers permanently, it needs more oil. The price of oil is considered to be an indicator of the economic growth. When the „black gold” becomes more expensive, it is expected a rapid growth of the economy. Conversely – when it falls, then the growth prospects are not very positive. However, you should bear in mind that the price of oil largely depends on the level of the dollar, measured in USD currency. For example, if the price of the raw material is persistently above 70 dollars and reaches the level of 80, this could be an indication for further good months of the world markets.
The movement of the euro is also determinative. Before the growth of the crisis in the Euro zone, the movement of the euro was not seen as an essential factor for the markets. Currently, however, investors and analysts watch closely the single currency in an effort to anticipate the future of both Europe and the USA. The problem is not so much about the depreciation of the euro, but about its speed. Years ago, the problems in Greece, Spain and Portugal led to a rarely seen weakening of the single currency, which in a large extent, is a reflection of the level of panic. The movement of the euro suggests investors’ sentiment.