19, November 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

We have observed the profit taking continuation on long positions within US dollars. At the moment of quotation the pair EUR/USD reached the level of 1.2540, the pair GBP/USD is consolidating around the level of 1.5660 and the pair USD/JPY reached the level of 116.70. After that the US dollar once again strengthened its position.

The commodity and the bond market dynamics indicate that the institutional investors continue to open "longs" within the dollar. Particularly the strong government bond yield spreads expanded within the pairs GBP/USD and USD/JPY that confirms the current trends stability within these instruments.

We should also speak about the Japanese yen. The Japan's GDP release for the third quarter pointed out to the technical recession that the yen weakening. And now the Japan financial authorities suggest that the sales tax rates increase from April was a mistake. In this connection, we can expect the further Japanese yen decrease.