18, November 2014

Fundamental analysis

 EUR/USD (a 4-hour chart)

We observed volatility spikes within the major pairs last Friday that continued on the yesterday trades. After the moderately positive euro zone GDP data the EUR/USD reached the mark of 1.2550 from which the pair fell. The economic growth showed 0.2% in the 3rd quarter instead of the expected 0.1%. However, traders ignored this report amid the US strong economic growth, but economic growth in the Old World has not led to sustainable development. The US positive macroeconomic statistics will allow the euro/dollar to test 24th figure. Both releases from the United States pleased traders with the positive data and at the moment of quotes reached the level of 1.2455.

The pair GBP/USD has started the trading week at the minimum value over the past 13 months. The Bank of England inflation release that was published on Wednesday 12 November has sent the pound to knockout. We have watched both the pair GBP/USD reduction and the UK and the US negative bond yields expansion for the last three trading days of the last week. The US positive macroeconomic retail sales and the consumer confidence statistics by the Institute of Michigan has only reinforced the "bearish rally" within the British pound and at the moment of quotes reached the mark of 1.5720 after which the pair decreased back to the minimums.

The United States pleased traders with the positive macroeconomic statistics. The October retail sales rose by 0.3% while the consumer confidence indicator by the Institute of Michigan showed maximum values in July 2007. The increased consumer confidence is laying a strong foundation for strong economic growth in the 4th quarter of the current year.