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FEP Finance Club - FX December Report
FEP Finance Club - FX December Report
December 2014
EUR/USD 1M
EUR/USD 1Y
1,2600
1,4500
1,2500
1,4000
1,2400
1,3500
1,2300
1,3000
1,2200
1,2500
1,2100
1,2000
1,2000
1,1500
1,1900
01-Dec
1,1000
08-Dec
14-Dec
20-Dec
28-Dec
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
MARKET ANALYSIS
Technical Analysis
Following November, the EUR/USD has presented a trendless evolution, between 1.2244 and 1.2570, consolidating this way after
a major drop. A monthly high was achieved on the 16th of December. Since then, the pair returned to its downward trend. A
breakout of the upward trend line, along with a crossing of the 50 MA, reinforced a bullish USD.
The support previously established at 1.2244 was breached, as the EUR/USD dipped to 1.2168. This level worked as a short term
support, further turning into a resistance as the USD continued its journey up. For now, 1.2094 is being tested and if it is not
crossed, the level of 1.2168 may be tested again as a resistance. On the other hand, 1.20 and 1.18 are just around the corner.
Fundamental Analysis
The EUR/USD remained bearish in December, trading at 1.2244,
as German PPI showed up a bit better than expected, along with
GfK consumer climate. The dollar fosters again against the euro,
as the Federal Reserve announced that interest rates are to be
kept low for now, revealing some patience concerning the stance
of monetary policy. Feds announcement did not accelerate the
timing to increase interest rates, which is expected to happen in
mid-2015. Regarding Europe, inflation has been declining sharply
since the end of 2011. At the moment, 12-month inflation is well
below the ECBs stability target of 2 percent as some countries
are experiencing deflation. ECB is thus preparing quantitative
easing, by performing bond purchases, overriding German-led
concerns.
Calendar
Jan. 2 U.S. ISM Manufacturing PMI
Jan. 7 EUR CPI Flash Estimate y/y; U.S. Trade Balance;
U.S. FOMC Meeting Minutes
Jan. 9 U.S. Unemployment Rate
Jan. 15 U.S. PPI; U.S. Unemployment Claims
Jan. 16 U.S. CPI m/m
Jan. 20 German ZEW Economic Sentiment
Jan. 21 U.S. Building Permits
Jan. 22 ECB Press Conference; U.S. Unemployment
Claims
Jan. 23 French and German Flash Manufacturing PMI
Jan. 25 Greek Parliamentary Election
Jan. 28 - FOMC Statement
Charlotte Hoefner
andre.moreira@fepfinanceclub.org
charlotte.hoefner@fepfinanceclub.org
Joo Fernandes
joao.fernandes@fepfinanceclub.org