19, February 2014

EUR/USD (a 4-hour chart)

 EUR/USD (a 4-hour chart)

The euro has been little changed since Monday, getting support from the prospects of forming a new government in Italy and a possible economy improvement in the euro zone. The Bundesbank said in its monthly report that the German economy experienced a rise in the winter, which would be reflected in 2014 GDP. The German government also raised its forecast for GDP growth in 2014 from 1.7% to 1.8% last week. At the same time, ECB representative Nowotny said that the question of lowering rates remains open, despite of strong economic growth in the euro zone in the 4th quarter.

The British pound has made another leap up against the dollar in the early session and reached the new local maximums. However, the "cable" could not keep the position and rolled down due to a strong opposition resistance, which resulted in a loss on the day. Obviously, technical factors prompted investors to lock in profits of this pair after a sufficiently long "bullish" rally.

Weak growth performance of the Japanese economy provoked the rise of the yen versus the dollar in early trading yesterday. However, later, the "green" returned all their losses and closed the day up versus the Japanese currency. Probably the realization that the Bank of Japan remains faithful to the rate of mitigation policy caused a surge of interest in the dollar the past auctions.

The Australian dollar rose early in the day on the back of strong Chinese data, published on Saturday, but then declined. The number of new loans in China in January rose to 4-year high - 1.32 trillion yuan, exceeding forecasts at 1.1 trillion yuan. The yen weakened slightly after the publication of weak GDP report Japan. According to preliminary data, GDP for the 4th quarter at an annual rate increased by 1% compared to 1.1 % growth in the previous quarter was significantly below expectations of 2.8% growth.