24, July 2014

EUR/USD Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar continued to strengthen against its major rivals. The DXY dollar index finished trading at around 80.78. The pair EUR/USD was bearish against the positive macroeconomic statistics from the United States publication. The June inflation showed a growth to the level of 2.1% year on year and it shows the growth to the Fed target level for three months in a row. This release only inflames the debates on the earlier interest rates increase by the FOMC which will support the dollar.

The GBP/USD will be under the pressure and the only thing that can cheer up the "bulls" is the strong report from the CBI industrial orders in July. However, this release came out much worse than consensus-forecast and after the USA inflation data we can see the pound sales. Only the pair cross-course restrained the "bears" pressure and did not allow the pound to test the psychological level of 1.7000.

The positive macroeconomic statistics on the inflation and the real estate market in the United States in conjunction with the price increase on the world markets stocks maintained the USD/JPY demand. However, after the European foreign exchange market participant's departure the bullish enthusiasm began to fade as we observed profit-taking on the long positions.