EUR/USD (a 4-hour chart)
Euro closed the week at 1.3000.
USD growth was caused by strong data on employment in the United States and, unlike last year, the negative correlation between stocks and the dollar, the dollar grew along with Wall Street.
Inverse correlation has always been a rule for traders, especially with the release of important news, such as the U.S. NFP on Friday. But now the market reacted the exact opposite. Shares grew along side with the dollar.
On Friday, the dollar rose against most of its competitors and the EUR/USD fell below 1.3000 level, to a new three-month low 1.2955. Still the pair managed to recover some positions and closed at 1.3000, 0.80% lower at night.
The news was not so good for Germany as the industrial production fell by 1.3% in January compared with the same month of 2012.
Fitch Rating has decided to downgrade Italy to "BBB +" from "A-", citing the inconclusive results of Italian parliamentary elections and a deep recession as the main reason. Fitch took five extra days to publish its decision, despite the rumor of it has begun to spread in the market on Monday. Forecast remains negative for Italy.
So, the good news in America against the bad news in Europe. If the players decide to trade long and ignore the other news the result will be the further growth of the dollar.
Investors believe that the U.S. economic engine is running well.