18, February 2016

Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar purchase dominated despite some weak data from the US. Investors’ sentiment changed to a negative one when the oil prices returned to a decrease, which was characterized by a high volatility, and were the main driver for global markets.

On the one hand, ZEW Economic Sentiment Survey showed a growing pessimism among financial experts. On the other hand, the Fed’s last meeting minutes were published. Traders expected to see a dovish rhetoric of the monetary authorities regarding energy prices falling and global economic growth slowing down. By the end of the trades the pair euro/dollar slightly decreased.

The British pound recovered after the employment data release. The unemployment rate remained unchanged at 5.1%, compared with the forecast for a drop to 5.0%. Claimant Count Change fell by 14.8K in January, while the Average Earnings including Bonus increased by 1.9% in December. The pair pound/dollar fell by the end of the trades.

This year we have seen high volatility in the financial markets. The last FOMC meeting minutes were published. Traders’ expected the minutes to coincide with the Janet Yellen’s comments in front the US Congress, that the labor market is showing a positive trend. However, the risk significantly increased due to low energy prices and the slowing down of the global growth. According to minutes some leaders are afraid of the US economy slowdown amid China's economic problems. The majority believes that the inflation will rise to 2% in the medium term. The Fed stressed that the date of interest rates rising would depend on the incoming economic data. The pair dollar/yen was trading in the consolidation corridor.