11, January 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The Chinese market collapse for more than 7%, the Chinese stock exchanges trading suspension, cheap oil – all these factors supported the euro and the yen. The dollar experienced difficulties with a growth amid the global markets negative sentiment, the Fed soft minutes as well as the weak labor market data. The US issued the employment outside agricultural sector release. The data came higher than expected 200 thousand. The number of employees amounted to 295 thousand.

The struggle between the major competitors, the euro and the dollar, is continued. We believe that the euro current growth looks more like a temporary correction while the dollar remains on a horse. The pair received almost no support from the macroeconomic data which had the mixed background. By the end of the trades the pair euro/dollar increased.

The pound was the main outsider among the main currencies. The Cable has recently been quite sensitive to the oil prices drop which has fallen to 11-year lows. The Sterling slightly corrected after the weak USA data, in general, the pair remains under strong pressure. The UK published the trade balance: -10,64B against the forecasted -10,50B. The pair pound/dollar closed the trades with a decrease.

At the same time Japan did not publish important reports. The dollar dynamics is the main driver for the yen. The pair USD/JPY sharply fell by the end of the trading day.