14, January 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

The US dollar continued to strengthen against its major competitors - the dollar index basket (USDX) finished the trading day at the mark of 91.96. It is worth noting that the trading day was very poor with important macroeconomic statistics and in this regard, traders focused on the commodity market dynamics. The Brent and the WTI oil once again demonstrated their weakness at the beginning of the week that supported demand for the dollar in the first half of the day. But then traders decided to take profits and we saw a rebound within some major currency pairs.

The euro remains under the speculation pressure that the European Central Bank can implement quantitative easing in the course of the next meeting on January 22. During the weekend, the head of Italy's central bank warned that the euro zone was threatened by the deflation risk and said that the best way to deal with the looming threat was the government bonds purchase.

On Tuesday the dollar fell to the three-week low against the yen as concerns over the continuing fall in oil prices reinforce fears about its impact on global growth and inflation, boosting demand for refuge.