12, June 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The pair was sold yesterday since the London trading session opening which is the most liquid in the Forex market confirming the downtrend that started May 8. There was no important macroeconomic statistics from the EU and the U.S. publishing. The Bloomberg experts noted that the market has returned to the "Kerry - trade" game - financial institutions trade with the low interest rate currencies including the euro where the refinance rate is 0.15% and borrowings also acquire the higher-yielding currencies such as the South African Rand and the New Zealand dollar, making a profit at the interest rate differential expense.

The UK industrial production in April rose by 0.4%, in line with the market participant’s expectations. However, the positive news background did not support the demand for the GBP/USD pair – investors still worried about the high British currency course that may become a barrier to the strong Albion economic growth.

The USD/JPY has ended the trading with a moderate decrease by 0.15% on the correction in global equity markets in general, and the Japanese stock market in particular. The Nikkei 225 stock index remained under pressure during the day due to the long positions closure that cheered "bears" to open short positions. However, traffic slowed down at the level 102.21 and we watched a technical bounce when bulls returned to the U.S. stock market.