22, December 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

Last week the US dollar continued to strengthen against its major competitors - the dollar index basket (USDX) closed the trades at the mark of 89.25. The pair EUR / USD moderately declined during the day amid the US Treasuries and the German bond yields. The Ifo institute Germany business climate release showed a growth to the mark of 105.5 in December, but came out at the level of forecasted medians that did not cause a strong reaction from the traders’ part. The commodity market downtrend dynamics also supported the dollar.

The dollar slightly increased against the pound at the end of the last week. Earlier the pound was in demand amid the UK retail sales positive release. The pound sales increased by 1.6% in November that significantly exceeded the traders’ expectations. It should be noted the cross-rate euro/pound significant reduction after the UK data publication. Namely the cross-rate dynamics allowed the pair GBP/USD to grow before the day closing with a decrease.

The positive stock markets dynamics with the US jobless claims reduction supported the US dollar against the Japanese yen. Bulls open long positions, counting the uptrend continuation. The Japan and the US negative bond yields also confirm the bullish sentiment predominance within the dollar.