19, January 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

Las week Thursday will undoubtedly go down in the currency market history. This time main newsmaker was the Swiss Central Bank that announced the refusal from the fixed exchange rate within the euro/franc that led to the volatility surge in the Forex market. First, traders rushed to buy the US dollar against its main competitors that pushed the dollar index basket (USDX) to the fresh 11-year high. But then, we could see a sharp reversal of the major pairs during one hour. Although the US dollar closed the trading day on a positive note. The Bloomberg agency in the midst of the US trading session reported significant losses among institutional investors who were clearly not prepared for such an event. This factor also "added fuel to the fire."

The US will also publish the inflation report this week. The bearish rally in the oil market with the US consumers income reduction show the inflationary pressure compression. In this regard, we can expect it at the level of the forecasted medians that can trigger a partial profit taking on short positions. The US Treasuries bond yields have set a fresh low for the last year and a half.