Daily Market Review - 03/20/2014

EUR/USD

Yesterday the currency plummeted. The dip was roughly 100 pips. Obviously yesterday announcements of the FOMC and Yellen had its impact on the pair. So now the forecast is consolidation on current levels with potential subsequent rebound.

USD/JPY

Here we see a similar picture but upside down. The Dollar rallied against the Japanese Yen. From the height attained the rate is gradually declining, what suggests correction. The outlook is bearish.

GBP/USD

The pattern of the Pound is very similar to the one of the Euro. The difference is that after the fall the rate is already going up, so the Pound is stronger than Euro now, as we already see the recovery of the rate.

Market Overview

On Wednesday the markets were hot. In the first part of the day the Euro was trading in the narrow range in anticipation of the results of 2 day meeting of the USA FRS. In spite of the weak economic growth in winter in the leading economy of the world, everyone expected of the FED a further contraction of the QE3. The US regulator surprised everyone.

Along with reduction of volumes of bonds’ purchase by $10 billion a month, there was an announcement about a faster contraction of unemployment; assessment of inflation forecast didn’t change: the FRS expects to return to the goal level of 2% in 2015-2016. Against such positive background there was a strong appreciation of the US Dollars against its main counterparts. As a result the trading day on the pair ended with losses at 0.9% at 1.3830.

As for the Pound an ascent was seen against the background of a positive report on the labor markets. Amount of unemployed has reduced in January what along with growth of salaries is a good signal for continuation of recovery of Great Britain.

The USDJPY was consolidating near a strong resistance at 101.66. Report on trading balance in February couldn’t support “bears”. On the contrary “bulls” have been waiting for a growth trigger, which came from the US eventually.

Economic Calendar

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