Daily Market Review - 09/05/2014

EUR/USD

EURUSD_Sep 5 2014

The pattern speaks for itself. After a downfall the Euro is trendless, what is quite natural in this situation. Obviously the bias is bearish, as the decline of the Euro rate is only a matter of time.

USD/JPY

USDJPY_Sep 5 2014

We now witness correction of the upward trend, which in spite of that remains intact. Up slanting trend line provides strong support for the asset, and its violation will be a signal for potential trend reversal.

GBP/USD

GBPUSD_Sep 5 2014

Looks like the Pound was also “impressed” by the Euro fall. So the pattern resembles the one of the Euro. Meanwhile future trend is not really clear, so analysts refrain from any particular comments.


Market Overview

The downgrade of the rate by the ECB has become quite unexpected. The Euro of course reacted with an abrupt fall. There was an announcement about the beginning of securities purchase and mortgage bonds.

One can’t help paying attention to the fact that Draghi shakes the market again, when no one expects any surprises. But there is no point to assume, that these actions are going to facilitate things for slowly drowning EU. First of all these actions had to be undertaken a few years ago, then the effect would be more significant. Second of all downgrading of the Euro will be used by the market and won’t have a long term effect, and consequently won’t help real economy. The third thing, the issues can’t be solved by monetary policy only. Draghi himself constantly repeats that. The EU needs serious structural and fiscal reforms, first of all to fight unemployment, which remains the most important issue and in a lot of states remain on record high levels, including Greece, Spain, and other states.

The regime of austerity which had been so actively imposed by Merkel lead to significant downgrade of economic growth figures, increase of unemployment, and decline of competitiveness of European goods. In tough conditions, especially when Europe takes part in “Russian sanctions”, which damage European business, the depreciated Euro won’t give significant support to export. But participation in currency war becomes more and more obvious, and situation in financial sector turns to more and more dangerous.


Economic Calendar

00:15

USD

FOMC Member Fisher Speaks

01:00

USD

FOMC Member Kocherlakota Speaks

06:00

EUR

German Industrial Production (MoM)

09:00

EUR

GDP (QoQ)

09:00

EUR

GDP (YoY)

12:00

BRL

CPI (YoY)

12:00

BRL

CPI (MoM)

12:30

CAD

Employment Change

12:30

CAD

Labor Productivity (QoQ)

12:30

CAD

Unemployment Rate

12:30

USD

Nonfarm Payrolls

12:30

USD

Private Nonfarm Payrolls

12:30

USD

Unemployment Rate

14:00

CAD

Ivey PMI

14:00

MXN

Interest Rate Decision

The post Daily Market Review – 9/5/2014 appeared first on Citrades.

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