17, March 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

The end of the weekend was very volatility for the Forex. A decrease in the U.S. dollar against its major competitors was noticed. The main event of the previous week was the Mario Draghi’s statement where he said tha the current euro rate was very high and that fact could threaten price stability. Also, the head of the ECB said that he expected a decrease in the single European currency in the short term. Geopolitical risks increase with the unstable Ukrainian political situation. Nevertheless, investors are actively buying risky assets in the Asian and European sessions.

The USA issued the retail trade release for February, which came in line with expectations and showed 0.3 %. However, the same January report was revised downward by 0.2% that still points to some problems in the world's leading economy. Applications for unemployment benefits in the U.S. declined by 9000 last week, in the light of his news "bulls" started to take profit on long positions. The output from risky assets was widespread and affected not only the currency market, but the stock market as well.

The GBP/USD finely showed a growth. After several days of a price drop - the "bulls", considered the current levels attractive, they opened long positions. Still the pound needs serious drivers to continue the growth. In the light of that background we can only expect a short-term speculative demand.

The aggravation of geopolitical tensions had a negative impact on the Nikkei 225, which sent the dollar/yen down. Despite the good growth of quotations last week - USD/JPY is experiencing a lack of serious drivers now.