Daily Market Review - 03/18/2014

EUR/USD

The Euro is close to test 1.3966. Current decline doesn’t extend below the up slanting trend line, and the rate is gradually approaching the goal. Otherwise in case of decisive trend line breach, it will be a reversal.

USD/JPY

As has been expected the downward trend continues. Bias remains bearish. Support is at 101.25. Breaking it will have a potent momentum for downward move.

GBP/USD

Apparently the correction is over. That abrupt fall is expected to be followed by further decline. Support might emerge at 1.6588 and 1.6576. We’ll see if the downward pressure is strong enough to break below.

The main currency pair continues to ignore statistics and is aspiring to get higher in spite of bright signals for correction and the background in general.

The “bulls” of the pair were overheated as the tool itself. The pair continues to appreciate, even though there are no solid reasons for that.

Recently there was quite weak February statistics on inflation issued in Europe (0.7% yy), but it didn’t cool down the passion of buyers, though it should have: probability of inflation is higher and now Consumer Price Index is near October level, where the ECB started to downgrade the rate.

News from Germany is quite ambiguous. On the one hand the head of Bundesbank marked, that the state would remain export oriented, but the population is going to continue aging, and this is inevitable at the moment even taking to account reforms effect.

On the other hand Germany is going to stay a profitable economy, as its role of exporter is not going to be revised.

Earlier it was mentioned that Germany should pay more attention to inner demand. Euro commission in March has emphasized that misbalances in German economy are not excessive.

The focus of the market is at 2 day meeting of the FRS.

Economic Content Calendar

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