21, August 2014

EUR/USD Fundamental analysis

EUR/USD (a 4-hour chart)

The American dollar has significantly strengthened its position against majors - the dollar basket index (USDX) updated the current year maximum values and ended the trading day at around 81.87. The positive macroeconomic data from the United States on the construction sector and inflation cheered the bears to open the short positions in the EUR/USD. The released building permits and new foundations showed a significant increase in July which is a positive factor for the American economy. The inflation release came out at a forecasts median, at around 2% y/y, which also fits to the strong economic growth scenario.

The GBP/USD came under a sales wave again, on the background of the negative inflation report. The CPI came in at 1.6% y/y in July. The inflation has been below the target level of 2% for 7 consecutive months which may postpone the rate increase. Immediately after the inflation release publication the pound/dollar has fallen by 78 p. setting a fresh minimum for the 4 last months.

The USD/JPY bullish trend is gaining strength. The global demand on the stock market, combined with the positive macroeconomic statistics from the United States supported the American currency against the Japanese yen.