02, September 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar became the market leader - the dollar index basket (USDX) is at around 82.73. The EUR/USD remained under pressure amid the weak Eurozone data. The Germany and Spain July retail sales were significantly decreased which together with the CPI decrease to 0.3% y/y has caused the euro sales. A deflationary threat still hangs over the Eurozone and therefore the traders wait for the ECB decisive actions on September 4.

The bulls once again tried to attack the level of 1.6602 on the GBP/USD, but once again the bears successfully repulsed the attack. After the Institute of Michigan revised data publication we saw strong pound selling. The consumer confidence index rose to 82.5 in August, which is a positive signal for the economy, now it is possible to expect the personal consumption growth.

The Japan macroeconomic statistics disappointed the foreign exchange market participants - in addition to the CPI decrease, the same household spending fell sharply by 5.9% in July which is extremely negative for the economy’s growth. In this regard, we observed the Japanese yen weakening and the USD/JPY price growth which at the moment reaches 104.10. The Japan's economy after the April 1 sales tax rates increase shows a sharp slowdown while the United States showed a steady growth over the same period which caused the bullish trend continuation.