04, February 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

During the day the pair EUR/USD enjoyed a demand amid the US negative macroeconomic statistics. The ISM manufacturing index showed decline to the level of 53.5 in January which is the lowest level since March 2013. The manufacturing sector weakness is a negative factor for the economic growth and against this background traders get rid of the US dollar.

The UK moderately positive manufacturing PMI was able to support the GBP/USD bulls. The UK 10-year bond yields increase negates all the traders’ efforts who rely on the strong uptrend. Moreover, the British Gilts and the German Bund bond yields enhances demand for the pair which also puts pressure on the British pound. Nevertheless the pound grew amid the dollar weakness.

The US ISM manufacturing sector weak release encouraged bears to short with USD/JPY. The US industry business activity has been declining for two consecutive months which is the first wake-up call. It should also be noted the manufacturing sector employment decline according to the ISM. The negative background caused not only the US dollar decrease, but also hit the US stock market - leading indices have updated the last week minimum values.