Recently, the fundamentals that are coming out of the U.S. have been kind of mix. The American economy ended 2013 with a bullish trend and very upbeat fundamentals.
Recently, the fundamentals that are coming out of the U.S. have been kind of mix. The American economy ended 2013 with a bullish trend and very upbeat fundamentals. Everything looked rosy for 2014, but the beginning of the current year has been kind of bumpy. For starters, the jobs report for December was a disappointment, but then the unemployment rate keeps falling; therefore, what can we do with this conflicting data? Let us try to answer that question with the experts at the Binary Options Broker Optionova (http://www.optionova.com).
The Federal Reserve has started to cut down on its asset purchasing program and in its recent meeting it decided to cut the purchases by another ten billion Dollars to leave it at 65 billion Dollars of asset purchases per month. The FED has also lowered its unemployment rate target to 5.5% as they are seeing that the rate has been dropping faster than they expected it.
Now, the stock markets have been rallying or at least they have been holding to their recent gains as the actions of the FED have made the markets believe that interest rates are to remain low for a prolonged period of time. At the moment, the FED does not want to stall the economy growth by raising interest rates, but they also have to think that it will get to a point where interest rates are going to have to come up. The current level of interest rates have been kept for almost two years now, and when they finally come up, the markets may have a strong downward correction.
The bond market is also a great guide to analyze the reaction of the markets to the fundamental data. If the yields on treasuries keep rising, then this is a sign that the comments of the FED made investors seek the shelter of bonds.
The Dollar Index, which measures the performance of the greenback versus a basket of the main currencies around the world, has stayed within a range, as noted by the analysts at the Binary Options Broker Optionova between the 80.15 as support and the 81.40 as resistance.
After the last visit to the 81.40 zone, the Dollar Index has been dropping, but we must be aware that a visit to the 80.15 level may stop the price there and possibly bounce to the upside.
The analysis was conducted in part by the analysts at the Binary Options Broker Optionova and the experts of the online trading magazine, Masterforex-V World Academy (http://www.masterforex-v.com), considered the best Forex educational project since 2009 to the current year.