EUR/usd
Though we can see some shifts in the rates, the greater part of them is not worth considering. The trade volumes this week are the lowest over the years of crisis. The VIX shows the decline down to the levels last seen in July 2008. What's wrong with the lull in the market? The wrong thing is that usually such lulls grow into tremendous volatility and at the best swing the markets round. Yet the markets are sure to be a curious picture to see. The thing is that since June the stock markets have been forming an upward trend, which cannot be said about the single currency. At this the only variant when growth of the single currency won't spur demand for riskier assets, including stock indices, is as follows: the European politicians finally agree on the bailout of Spain and terms for providing liquidity to EU banks. Besides, for the events to unfold in this way the Fed should give more hints at the absence of QE in September. Frankly speaking, such an outcome is hardly possible. Seeing the downward reversal in the markets as highly probable, we believe that it is more likely that at the moment the single currency is consolidating before the further settling down. Yesterday it sank below 1.23. Today after brief attempts to go up, the rates again returned to the 1.2270 area. The support line, passing through the lows of the previous three weeks, couldn't withstand, so there are grounds to expect strengthening of the bearish pressure on the pair. In the bunch of macroeconomic news the surprisingly poor statistics on the US inflation are of interest. In July the prices remained unchanged, and the annual rate of price growth has shrunk down to 1.4%. 5-7 years ago that would have been enough to weaken the dollar in reliance on a softer policy of the Fed. However now, the primary focus is kept on production. This indicator shows a 4.4% growth annually, and the capacity utilization rate has already risen to 79.3%, which is a sign of the favourable economic environment. The American corporations are soon going to start an active build-up of production and staff. Now they simply don't want to do this beforehand, as was usually the case before. Thus, the last quarter of this year promises to be rather optimistic, even without dopes from the Fed. Having no concerns about the real sector, Bernanke will play his card, demanding the clear fiscal plan from the officials, to the end.
GBP/USD
Yesterday Britain managed to bring some joy in the markets with its favourable employment statistics. Mainly due to the Olympics the claimant count has decreased by 5.9K in July. And according to the ILO over the last three months to July employment has grown by 201K. Remember that at this the country's GDP shrank by 0.7% over the same period of time. It is a very big divergence. The BoE's Mervyn King finds difficulty in giving a proper commentary to this situation and prefers to focus on positive signals. Actually, GBP/USD once again failed to break the resistance of the 200-day MA and now is more likely to go below 1.5570.
USD/JPY
The yen seems to be the first to wake up after the summer hibernation. Having broken the channel resistance, USD/JPY keeps clambering up. Now trading is already at 79.30. For the pair, whose trading range has been scarcely wider than 1% over the recent month, it is a very impressive move. It's quite likely that today or tomorrow the pair will want some rest and the former resistance at 78.70 will be again tested as a support.
USD/CAD
Carried away by the looming reversal in the aussie, we absolutely forgot about another ‘commodity' dollar –the Canadian one. This currency has been appreciating across the wide market range, even against the American dollar. Now trading is below 0.99. However, it's worth mentioning here that this level is considered to be a strong support. At the beginning of the year the pair didn't manage to consolidate below it and the expected reversal in the markets (see above) is also likely to push the pair up.
