26, August 2015

Fundamental analysis

EUR/USD (a 4-hour chart)

The US dollar opened the trading week in the negative area – the dollar index basket lost 1.5%, having reached its lowest level for seven months. The Asian, European and American stock markets have added impulse to the dollar sales. The US dollar was sold against all the majors; as a result the dollar continued its decline and recorded losses. The US dollar showed the biggest minus against the euro and the yen which were bought out not only amid frustration over the Fed policy outlook, but also as the refuge currency that was sold earlier in the transactions on the interest rates difference. However, when the stock market began to form reducing correction at the end of the trading session, the dollar got little support and was able to neutralize some of the losses.

The pair EUR/USD had strengthened amid the investors’ escape from the "risky assets". Nevertheless the pair fell by the end of the day.

The pair GBP/USD had increased amid the UK government bond yields increase. However by the end of the day the pair showed a sharp decrease.

The pair USD/JPY had declined. The demand reasons for the Japanese currency are similar as for the euro that is the carry trade transactions closure. This pair also changed the movement direction and corrected upwards.