15, May 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

Yesterday the pair EUR/USD increased amid the US retail sales negative reports. Traders had expected its growth by 0.3%, but the final figure came out at the zero mark. The April US PPI report will not be able to provide strong support for the US dollar. In the first month of the second quarter, the US 10-year bond yields have grown by 10 basis points that indicate the inflation expectations moderate increase.

Despite the Bank of England inflation negative report the pair GBP/USD still managed to finish the day in the positive territory amid the US retail sales weak data. By the end of the day quotations had increased.

The US weak economic data cheered bears to short with the USD/JPY which by the end of the day had consolidated. The debt market dynamics is also now on the bears’ side - the Japan and the US negative bond yields reduction will support demand for the Japanese yen.