Daily Market Review - 07/11/2014

EUR/USD

The Euro is indecisive. Thus it continues trading within the range. That is why it is quite hard to assess its further move. So the boundaries should be watched closely for a break, which will define further trend. Anyway general bias is rather bullish than bearish.

USD/JPY

The pair has started to consolidate above earlier mentioned support. The remarkable thing about the pattern is that the range of up down fluctuations is very narrow. It is quite reasonable to expect a change of trend.

GBP/USD

Pound’s consolidation apparently is going to last longer than expected. Nevertheless it leaves previous forecasts intact. Therefore analysts still anticipate soon coming resumption of the upward trend.

Market Overview

In recent week there has been formed a particular trend: European statistics have been coming out much worse than expected figures. There were May data on French and Italian manufacturing. Instead of expected slight increase statistics had dropped by 1.7% and 1.2% respectively, what has become the worse figure since November 2012. It was a strong strike on GDP growth in the second quarter.

More over inflation in France has been coming out the second month in a row on 0 levels, and it is not likely that ECB credits to European banks will help a significant acceleration of the index in coming months. Consequently there will be again talks about necessity of QE launch by the ECB, and this is good for Euro bears. The more so it is not hard to come up with an example: the Bank of England is planning to continue assets purchasing.

Perhaps after official exit of the Euro zone form recession current statistics is grim. The record on industrial production in May was set by Netherlands, where the fall had constituted 1.9%. As a reminder the fall of the figure for the same period in Germany was by 1.8%. If in the next month there is no serious bounce up, then the second quarter will be closed with a big minus.

The growth of the Euro zone in the first quarter constituted 0.2%. If we take to account the fact that in the States significant growth is expected in the second quarter, then weak European statistics might become one of the triggers pushing the Dollar down.

Economic Calendar

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