27, October 2014

Fundamental analysis

EUR/USD (a 4-hour chart)

The US dollar has closed the trades with the quotations growth for several days in a row - the dollar index basket ended last week at around 85.88. The EUR/USD remained under pressure during the day amid the US bond yields growth that supported the dollar demand. The news was mixed – the France PMI manufacturing sector index showed a decline to the level of 47.3, while a similar Germany’s release showed growth to the level of 51.8. It is worth noting that despite the positive data from the eurozone leading economy – the business activity index is still below the annual average and it is still too early to speak about the negative trend breakthrough.

The UK continues to disappoint traders with the negative macroeconomic statistics. This time we got the weak retail sales data for September that allowed bears to test the 60th figure strength. The low consumers’ activity in the UK for the recent months is a negative factor for GDP. However, the bears’ strength quickly dried up and we observed the pound lost ground recovery at the US trading session.

The bulls with the pair USD/JPY were inspired by success and rushed into the fight! No wonder, we had seen the strong risky assets demand that resulted in the "bull rally" on the global stock markets as the last week. It is worth noting that the US macroeconomic data publication about the initial jobless claims cannot be considered negative. Despite the fact that the index has risen to the level of 283 000 for the last week- four week average again showed a decrease that is a positive factor for the labor market. Against this background, we observed the US and Japan bond yields expansion which also supported the US dollar demand.