EUR/USD (a 4-hour chart)
The week began with the decline; the decline of the quotes was not only in the currency market, but also on the global stock market. The pair EUR/USD moderately decreased during the day. The USA released the production ISM. The index was better than the median forecast at around 53.2 p, which is the first signal of a recovery from the December and January recession. However, one release certainly does not count and we have to look at other indicators that will be published this week.
The driver for the euro became the head of the ECB, Mario Draghi, who said that the longer the inflation rate will be at the current low levels - the more chances not to see rates at 2%. The traders took this comment as a hint on the possible quantitative easing, which caused some euro weakening.
The Center of Macroeconomic Research Markit Economics published a PMI manufacturing report. The data came as it was expected and did not cause strong reaction of the investors.
The economic recession in January together with a reduction of the inflationary pressure still has a negative impact on the UK economic recovery. Positive report from the U.S. on ISM index in the manufacturing sector, as well as geopolitical tensions between Ukraine and Russia cheered "bears" to open short positions.
The pair USD/JPY remained under the pressure. Investors in the global political instability preferred to take profits on long positions in the stock markets, which negatively affected the valuations of the pair. The USA pleased currency market participants with a good ISM manufacturing report which supported the demand for the U.S. currency.