21, November 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

This week key event for the pair EUR/USD was the Fed "minutes". As it was expected the monetary authorities announced the inflation decrease in the medium term amid the oil prices reduction and the dollar growth. Also the Federal Reserve representatives said that the US growth can slow down in the medium term if the economic and financial situation continues to deteriorate in other countries. Traders negatively perceived the monetary regulator message and began to open the "longs" within the euro. However, as soon as the phrase appeared that the FOMC considered risks of the economy and the labor market perspectives were almost balanced, we again saw the bullish sentiment within the US dollar.

The pound is aimed to test the 57th figure. The Bank of England last meeting minutes did not surprise us: Will McCafferty has voted for the rate hike four months in a row and other seven MPC members are less optimistic about the monetary policy tightening.

Despite the technical recession and the political instability in Japan - the Bank of Japan head Kuroda assesses quite positively the economic growth perspectives. At the same time the head of the monetary regulator told that he did not think his comments about the economy were “optimistic." Nevertheless, the currency market participants ignored the Bank of Japan press conference and again began to increase the "longs". The pressure on the yen increased after the "Fed" minutes publication. Then the dollar slightly fell.