EUR/usd
The single currency failed to break through 1.33 yesterday. The pair was being sold despite the fact that Final PMI for Europe proved to be more positive than expected before. eurusd stopped growing at 1.3299 in the heat of the EU session and afterwards was falling down to 1.3230 right till the beginning of the active US session. In its turn, ISM Non-Manufacturing PMI couldn't support the dollar's strength. It is a bit surprising as the index totaled 56.0, which was last seen only in February, and, in addition, proved to be much above the previous (52.2) and forecasted (53.2) rates. Just a month ago such news could have produced much influence on the course of trading, strengthening positions of USD. But now these data only create more uncertainty. In our opinion, the current situation in the eurozone is not bad, when compared with the preceding months, but when set against the US performance, it looks not very bright. Anyway, Forex reacts mainly to the change in the situation and dynamics, rather than to the actual state of affairs, so we think that these trends (slowdown of the USA and acceleration of Europe) are able to shift the balance in EURUSD towards growth. However, we need to make a reservation here. The thing is that we won't necessarily observe continuous and unstoppable growth all the time. We should understand that from time to time there can be moments of consolidation. It's quite possible that today we'll see one of them. Today's peace and quiet in the markets can be broken by German Factory Orders (growth by 1.1% is expected here) and the US Trade Balance (a slight deficit decrease to 43bln is forecasted).
GBP/USD
The sterling has experienced an enviable rally in the last two trading days. gbpusd grew from 1.51 on Friday to 1.5375 yesterday. Now trading is more or less quiet, the correction sentiments prevail and the pair has pulled back to 1.5330. We are waiting for important stats on the industrial production. It will be interesting to see if the PMI rates will be confirmed by the data on the real activity in the sector. Remember that Manufacturing PMI, released on Friday, showed the highest rate for the last three years. However, this indicator has been pointing out growth for three months in a row, while the actual production has been stagnating.
AUD/USD
The Australian CB cut the rate by a quarter of a percent down to 2.50%, just as had been expected by the market participants. Moreover, the accompanying commentary has pointed out that at present the aussie remains overvalued and that there is still some space for the further rate cut. The RBA's head is turning more and more into an obvious dove. Anyway, the markets were “selling facts”, purchasing the Australian currency after the publication of the decision.
USD/JPY
The yen, a workhorse, keeps benefiting those, who stick to range-trading. The pair fell to 97.80 last night, where it sharply reversed and headed upwards. Now trading is at 98.60. But be careful as this trading model is too simple for Forex. Such models don't exist for long.
