03, November 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The US dollar continued to strengthen against its major competitors - the dollar index basket finished the trading day at around 86.15. The pair EUR/USD has lost 0.2% amid the US positive statistics and the Euro zone negative data. The US GDP preliminary data for the 3rd quarter came out better than the forecasted medians, showing an increase to the level of 3.5%. We have observed a strong economic growth that supports the dollar demand for the second quarter in a row. The Spain and Germany inflation releases disappointed traders with their weak data - the major economies inflation is decreasing once again amid the lower oil quotations and the weak consumer demand. The euro zone CPI decline jeopardizes the possible euro rise.

The GBP/USD was also under pressure amid the US positive macroeconomic data. The strong GDP data for the third quarter amid the Britain economic growth slowdown cheered bears to open short positions. At the moment the pound quotes reached the mark of 1.5950 and then traders began taking profits on the "shorts" and the British pound was able to consolidate. It is worth noting the US and the UK bond yields expansion indicates the further bearish sentiment predominance within the GBP/USD.

The bulls felt quite at ease within the USD/JPY. The US positive economic data supported the dollar demand as well as on corporate bonds demand in the US stock market. The dollar/yen enjoyed steady demand against this background and at the moment quotes reached the level of 112.30.