18, December 2014

Fundamental analysis

 EUR/USD (a 4-hour chart)

Every day the US dollar is thrown from one side to another - yesterday we saw the dollar increase against the majors. Earlier the dollar index basket decrease (USDX) to the level of 87.63. The pair EUR/USD strengthened in the first half of the day amid the Germany positive macroeconomic statistics. Two indices – the PMI manufacturing and the ZEW business optimism indicator pleased traders with the strong data. It is worth noting the final index of the second macroeconomic release overcame an annual average that points out to the negative trend breakthrough. The euro devaluation as well as the lower degree of geopolitical tension was positive for the Germany business climate the last month of the year.

The pair GBP/USD was in demand despite the UK CPI negative report for November. The UK inflation reduced to the level of 1% in annual terms that caused the 10-year government bond yields decrease to the level of 1.77% and increased the negative spread with US securities. Nevertheless, traders opened "longs" within the British pound. In anticipation of the FOMC press conference the dollar weakened that can signal about the large buying orders at the low levels. The sterling decreased at the end of the trades.

The USD/JPY remained under pressure in the first half of the day amid the global equity markets sales and the US and the Japan yield spreads reduction. However, we observed the bulls’ return to the stock market at the US session that immediately reflected on the dollar/yen quotes. However, now it is too early to speak about the full technical correction completion – the Nasdaq stock index lagged behind their counterparts, pointing out to the low demand for the risky assets.