21, May 2014

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

There was relatively quiet trade on major currency pairs amid the lack of the important macroeconomic statistics publication at the beginning of the trade week. The EUR/USD and GBP/USD enjoyed a moderate demand in the light of technically oversold and short positions closing.

The Eurozone construction fell to 0.6 % in March compared with February, after four months of growth. Particularly, the strong construction decrease was observed in the Eurozone’s biggest economy - Germany. According to the Bundesbank's monthly report published on Monday – it is expected to slow the German economy growth in the second quarter. The increased risks in developing countries and geopolitical uncertainties in Eastern Europe complicate the economy situation.

The pound was little changed on the day before the Tuesday UK inflation data release. It is expected to accelerate the annual inflation rate - to 1.8 % in April, compared to 1.6 % in March. According to Rightmove, the UK house prices continued to rise for the fifth month in a row. The house price index from Rightmove rose by 3.6 % m/m in May, the biggest monthly gain since April 2002.

The world's leading stock markets decrease put pressure on the USD/JPY and the quotations drop to 101.09. A good machinery and equipment orders report didn’t help to the "bulls", which in March showed a substantial increase to the 19.1 % level, indicating the industrial production rate growth in Japan. Traditionally, there is a demand for the U.S. dollar in the light of positive data - but this time, market participants have ignored this report. In the afternoon, the stock market trend turned around and we saw a dollar/yen moderate demand.