08, January 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

There was a quite volatile trading day yesterday. The dollar showed mixed dynamics against its major rivals. Traders still do not prefer to risk as they do have concerns to worry about. They are global economy slowdown, low oil price and the Chinese economy.

Soft Fed meeting minutes weakened the US currency. The regulator expressed his concerns about the inflation, the strong dollar which triggered the greenback sales. The US published the initial jobless clams (277 000 against the forecasted 275 000).

The euro got some support after the risky assets sales. However, the US strong labor market data gave new strength to the dollar. According to ADP, the December private sector employment level increased by 257 thousand. These figures are much higher than the forecast and the previous value of 192 thousand. However after the USA new statistics the pair euro/dollar strengthened.

A series of weak economic data postpones the Bank of England rate hike which exacerbates the divergence rate of the BoE and the Fed. That is another long-term negative factor for the Sterling. The trades closed with the pair GBP/USD decrease.

The USD/JPY accelerated its decline after the Fed meeting minutes’ publication. The price moved further down. The risk factor always plays into the Japanese yen hands.