On Tuesday, the EUR/USD traded into the red zone falling to 1.3330 - the lowest since August 2013. During today's Asian trading session the Euro is showing signs of support by consolidating losses at the 1.3370 resistance level. We can expect that if this level is breached with success then the pair could reach 1.3385 - 1.3400.
The Bank of England today downgraded it's projection of wage growth and gave the forex market a scare, causing GBP/USD to jump 40 pips initially, and then give it all back and fall an additional 100 pips. The problem was that the market has been overly optimistic that the Bank of England is raising interest rates at the end of this year.
The USD/JPY is heavily correlated to the yield on the 10-Year US Treasury Note. This is due to the fact that as yields on T-Notes fall, Japanese investors (which are one of the most powerful forces in the USD/JPY market) put their money back into Yen, driving the pair down. Inversely, higher T-Note yields mean that the Japanese will take money out of Yen investments and buy T-Notes in order to earn a return with the higher yields.
On Wednesday, the US dollar shot up against the Yen, and also grew against the Euro and Pound Sterling after US GDP came in a whole percentage point higher than expected.
According to preliminary data, the US economy rebounded by 4% in the second quarter of 2014, while experts predicted a rise of just 3%.
Beginners and experienced traders both have the same issues when it comes to trading Forex; they are all of the mind that they are trading a single instrument, like a stock, or commodity, rather than two instruments at the same time. So when they read bad news about the economy in the US, they decide that they must short the US Dollar. Conversely, hearing good news makes them buy a currency.
The United States has stepped up sanctions today against Russia as government forces from Kiev increased military attacks on anti-Maidan rebels in Eastern Ukraine. The response from the global community has been a unified call to cease hostilities, but actions from the US government have so far diverged from European measures to end the fighting.
US Jobless Claims yesterday were reported at only 304,000 versus an expected 315,000, which puts weekly claims at the lower end of the range of releases from the past year (the lowest has been 298,000 in May).
Compared to the Federal Reserve's rather articulated plan for exiting the most dramatic monetary stimulus plan in history, the European Central Bank has a muddier message as to how they will bring the economy of the EU out of the can. Our interpretation, combined with the current technical picture of the EUR/USD, signals continued choppiness in EUR/USD while the ECB's monetary policy outlook remains in limbo.
Вчера Федеральная Резервная Система (ФРС) США резко ухудшила свой прогноз по темпам роста экономики с 2.3% до 2.1%. Кроме того, председатель ФРС Джанет Йеллен выразила обеспокоенность ситуацией на рынке труда.
Негативная переоценка темпов роста американской экономики привела к снижению курса доллара на рынке форекс.