Daily Market Review - 07/25/2014

EUR/USD

Obviously there is too much pressure on the Euro now. The raise yesterday as expected has turned out to be a bounce, and the currency is unable to really appreciate.

USD/JPY

The asset has got out of the triangle pattern. Unlike previous forecast the rate went up. Nevertheless on 4 hour chart the picture still looks bearish. So most likely the rebound was only in the near term and it will most likely be followed by a retracement, the beginning of which we can already see.

GBP/USD

The downward pressure on the Pound has exacerbated. It has dropped below crucial level of 1.7000. If it crosses 1.6950 the limits of potential default will extend to as far as 1.6900 and even 1.6800 in broader perspective.

Market Overview

The Euro managed to get away from 8 month minimum by finding support in German statistics, but it couldn’t develop any serious growth. Manufacturing PMI and Services PMI demonstrated good results yesterday and improved general sentiment in the Euro, but couldn’t become a trigger for a bounce. Euro is still under pressure and now the list of negative factors is expanding because of new round of anti-Russian sanction from the EU. Political will might cost a lot to the economy of the region, which is weak anyway.

Monetary policy of the European Central Bank also puts pressure on the Euro. Investors are waiting that by the end of the summer the ECB will introduce Quantitative Easing. EU really needs it. It is clear that lowered interest rate is not going to show a necessary effect even with negative rate on deposits. While positive is seen only in the data in this or that way related to services in Europe: tourists are traveling and spend money. But this driver is short term, by the end of September it will be exhausted.

Today German statistical data will be in focus of the market as well. It will shape today’s trading at least before the release of US statistics.

Today we also have important data from Britain for the second quarter. Further dynamics of the pair will directly depend on the content of that release. Bears intend to act.

Economic Calendar

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