04, December 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The US dollar has strengthened its position against the euro and the yen - the dollar index basket (USDX) closed the trades at the mark of 88.63 near the four year high. The bears used the pair EUR/USD quotations growth to open short positions at the beginning of the week. Yesterday we again observed the German and the US bond spreads expansion. The FOMC representative Fisher pointed out that the monetary authorities are ready to reject the phrase "for considerable time" concerning the monetary policy. It should be noted that Fisher is traditionally the earlier federal funds rate increase supporter and it is not a surprise for the market.

The pound recovered some losses. Earlier the UK construction sector PMI index release has shown the lowest value for the last twelve months that with Gilts and Treasury 10-year bond yields increase sent the pair GBP/USD to knockout. The traders systematically sold the pound and against this negative background the quotations decreased. This decrease was followed by the pound growth.

The Japanese stock market came out the two-week consolidation. The Japan salaries report came below the traders’ expectations. With the US trading session opening we observed demand for corporate bonds that also supported the US dollar. Against this positive background bulls were able to break through the 119th figure.