EUR/usd
Demand for safe havens is still very strong in the markets. By now the single currency has fallen down to 1.3280. Last Thursday it was hovering around this level before draghi's press-conference. Moreover, this area served as a strong resistance in the last three weeks of the previous year. Thus, today we are to see an interesting skirmish between the bulls and bears. In case the bulls win the battle the former resistance will turn into a support, from where the currency will continue to grow. So now we only have to wait. Yesterday's statistics didn't have any significant influence on trading which now seems to depend much on technical indicators. We underestimated the depth of the demand slump in Europe when speaking about the trade balance yesterday. The stats showed that in November the season-adjusted trade surplus grew by 11bln. Exports increased by 0.8% after two months of decline and imports shrank by 1.5%, with the season-adjusted figures being back at the levels of early 2012. Altogether the countries of EA-17 have the trade surplus of €75.5bln since the beginning of 2012 in comparison with the deficit of 23.7bln a year before. Besides, exports grew by 8% while imports increased just by 2% in January-November. The US retail sales pleasantly surprised by growth of 0.5% in December against the expected 0.2%. However, the fact that the current consumption growth rate is much less than in the period from early 2010 till May 2012 should be kept in focus. The PPI stats were also released yesterday. The index declined much more than expected. The annual rate of growth slowed down from 1.5% to 1.3% in December. Today the CPI data are scheduled for release. They may prove to be worse that forecasted. If so, it will mark slackening of the annual inflation rate to less than 1.8%. But all that will hardly affect Forex, absorbed in the fight for the support levels.
EUR/GBP
Yesterday's performance of EURGBP increased our confidence about the technical nature of the last moves. For no special reason and without any positive domestic news the pound all of a sudden proved to be stronger than the euro yesterday. EURGBP was recouping its previous losses and covering the gap of the beginning of the week. The gap is covered, so the environment is getting favourable for the further growth. The housing prices in the country are growing, this was marked by a number of indicators and confirmed by the official data yesterday. Besides, it's striking that the retail sales should grow while produce prices are falling. RPI demonstrates the annual growth of 3.1% while the PPI Output speaks about a lower increase of 2.2% y/y. With the PPI Input the difference is even more visible, here the growth makes just 0.3% yearly.
USD/JPY
The abundance of short positions in the yen, whose volume was the highest over 5.5 years, required a correction, which is going on now. usdjpy is already close to 88 and, quite possibly, it will continue to fall. Apparently, this state of affairs will last till January 22, when the BOJ will take a decision on the interest rate. Yet, it may continue even after it.
AUD/USD
Traders are again at a loss with defining the aussie's status. On the one hand, it's a high-beta currency and as such is to be sold at the time when demand for safe havens and the yen is high. But on the other hand, the recent data show that China's demand for Australia's exports is quite strong. audusd is still at the upper bound of the 1.02-1.06 range. Should the correction in the markets end, the pair may easily break through it.
