25, November 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The dollar weakening was noted in the major currency pairs yesterday. If looking beyond the events within the pairs EUR/USD and USD/CHF, nothing remarkable happened at the last trades. The dollar strengthened against the pound and fell against the yen, but there were consolidation movements on these instruments and they were within the previously formed correction ranges.

In the dollar and the euro dispute there was a sharp dollar strengthening that led not only to the dollar increase by the end of the last week, during which the dollar was losing against the European currency most of the time. These euro large-scale sales for the dollar can be attributed to the ECB President M. Draghi’s speech who had promised to continue quantitative easing on Friday in his report at the European Banking Congress in Frankfurt. The ECB president statements gave more certainty that the European regulator would begin to include in their purchases the Central Bank and the Eurozone sovereign debt.

There were published little the US economic statistical data, the most interesting is the Fed Kansas City report that showed the manufacturing sector activity increase in November that was higher than expected - the index grew to the level of 7 from 4 in October, though we expected to see improvements only to 6. The week news does not plan to present the important data and those that are preparing to leave for the most part are expected to be with the positive dynamics.

It is unlikely that the attitude towards the US dollar has changed, if there are no surprising deviations from forecasts to the negative side for the dollar.