29, July 2013

EUR/USD (a 4-hour chart)

EUR/USD (a 4-hour chart)

Last week trading was rescued by unexpected news. Wall Street Journal wrote that at its next meeting, the Federal Reserve would review their methods of communication. They are planning some new ways to report market about their opinion on the future levels of rates. This information triggered selling in USD, although, in fact, it was the occasion rather than the real reason. The dollar still concentrated too many long positions; strength of the movement is also due to the extremely low liquidity.

The published data on conditions in the business environment in the Republic of Germany from the research institute IFO came out lower than expected, despite the fact that Friday's report confirmed the growth of business activity in the region. The index was 106.2 instead of 106.3 predicted, although appreciated by 105.9 of the previous month.

It disappointed bulls and led to the sale of the pair.

The published data on capital flows have confirmed the decline in the demand for foreign bonds by Japanese investors. And considering the downward trend of return on U.S. «treasures», probably, this trend will become more widespread.

The dollar index has serious intentions to close the lower third week in a row, thanks to the growth of the hope at the next FOMC meeting, no adjustment in the course of QE3 will be logged. The cause of this is the recent mass reduction of projections for U.S. GDP growth in the second quarter and the NFP, the figures for which will be published this week.