04, August 2014

EUR/USD Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar upward trend is speeding up. However, the market participants stayed away from an active trading as major pairs spent all day within the lateral trend.

The EUR/USD has ignored the weak Eurozone CPI for July. According to preliminary data, the inflation was reduced to the level of 0.4% year on year, and the deflation threat becomes stronger and stronger. The only thing that was a honey spoonful in a tar barrel is the unemployment reducing to the level of 11.5%. Nevertheless, the bond market mood are in favor of a further euro/dollar decline - the American and German bonds yield spread widening certainly will support the American currency.

Nevertheless, the pair fell at the end of the last trading week. The GBP/USD came again under attack, losing on the day of 0.2%. The investors are selling the British currency as the States came to the Forex with its positive macroeconomic releases. In addition, we observed the BoE disagreements about the tightening monetary policy which clearly plays into the bears hands.

The weak macroeconomic statistics from Japan did not allow the bears to compensate some lost ground on the USD/JPY. Reducing salaries combined with the rising unemployment in June became the negative factor for the personal use and will slow the GDP’s growth. Japanese stock market sales weren’t able to exert pressure on the USD/JPY - bulls are confident and keep the situation under control. However, the pair decreased.