Daily Market Review - 09/10/2014

EUR/USD

The Euro is still indecisive after last week. It has started its way down, but eventually is back on previous levels, following the downfall. Taking to account the fundamental background, the bias is bearish.

USD/JPY

The asset continues to appreciate further up. The goal on the upside is now 107.00, and the currency looks strong enough for that challenge. By the end of the week higher levels at 108 and 109 could be tested as well.

GBP/USD

The Pound is trendless. Obviously above 1.6000 it has encountered support, so the decline has slowed down. There are good chances for a rebound back up in the near term.

Market Overview

The main currency pair recently couldn’t continue its recovery, because of a new strike from the European macro statistics.

If investors do not trust the system, it means that there is something wrong with it. Recent data from Sentix have proved it again. Trust of investors in September turned out to be very poor: indicator has dropped to -9.8 points against expectations of 2 and previous figure at 2.7. These minimums are from July 2013 and most likely it is not the limit of teh downfall.

The peculiar thing is, that the index of current situation has dropped to -16.8 points (yearly minimum), at that the fall has occurred from 0.5 points.

Comments of the ECB representative Nowotny were negative for the Euro. Nowotny is quite famous for his love for details. Monetary politician has claimed, that the ABS program announced by the ECB persues the goal of market stimulating, which looks now small and insufficient. There are too many “ifs” in that process. In accordance with his words the ABS program will stimulate the economy better through the market, but only in the case if the plan works.

In general the situation for the Euro is grim. Basically there were no doubts that the Euro was overpriced by the market in summer and spring. Besides now investors have started to pay more attention to fundamental part. But such failure data can’t be avoided. The goal of shorts at 1.2900 is taken; the next goal of bears is 1.2855.

Economic Calendar

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