Daily Market Review - 07/23/2014

EUR/USD

The Euro continues to depreciate against the Dollar. It is now below 1.3470. The Euro hasn’t plummeted that low for months. Since February 2014 the rate was above the level. So taking that to account it is plausible to assume that the rate is going to continue its decline in the near term.

USD/JPY

The asset is ranged. The bigger picture on the 2 hour chart shows an ascending triangle, which is a bearish pattern with a corresponding forecast. So the bias is obviously bearish.

GBP/USD

The Pound keeps on going down. Next goal on the downside is 1.7000. This is a crucial support, which will determine further stage of the Pound pattern.

Market Overview

Decline of the Euro that continued on Tuesday had become one of the biggest strikes to the ECB. Unprecedented measures of another rate decline and launch of banks crediting program undertaken by regulator during its June meeting haven’t achieved any serious downgrading of the main currency pair. The market was flat almost a month and even attempted to get back to growth.

When Yellen made a statement about the possibility of early rates increase, it cheered up the bears cheered up a lot. Yellen’s words were preceded by a lot of negative European statistics, which couldn’t move the market. More over the pair almost lost correlating connection with the debt market of the EU states.

Also there is an opinion that softening of the policy has been final and
no new measures on the ECB side will be seen. Basically words of some ECB officials about compliance of regulators activity to the current situation in the economy and small probability of the launch of the program of assets purchase in the near future have contributed into forming of such point of view.

At that during March meeting Draghi expressed an essential thing for the ECB: he admitted that a very high level of the Euro in conditions of low inflation was the reason for serious concern. All that has been happening against the background of regular claims from European capitals, that the high rate was the direct threat to a weak economic recovery.

Everyone had expected that the June decision of the ECB will be able to weaken the main currency, but that hasn’t happened. Economists together ascribed calm market to the measures aimed at real and financial sectors.

At that the market has developed immunity to European news. Consequently the data from Europe is better to perceive with a deflator, while American statistics is still able to influence the Euro significantly.

Economic Calendar

The post Daily Market Review – 7/23/2014 appeared first on Citrades.