EUR/usd
The single currency with credit tested the 1.30 level yesterday. The bears didn't manage to push down the currency in Asian and European trading hours. Meanwhile Americans were already buying the euro, having driven EUR/USD a safe distance up. The euro jumped up to 1.3150, but this morning Asians resumed their attempts to press the pair, which is now trading at 1.31. The Asians' caution and demand for safety look quite natural. The nations with the current account surplus are in constant search of promising investment directions. And now the profitability of investments in the euro is rather doubtful. In fact, the matter isn't even about the chances to get profit from government bonds, but about the ongoing fears that the Greek cut will happen again with another country. In addition, some commentators note that under the market pressure the ECB and IMF won't be able to retain their privileged positions. Even the fact that India has decided to cut its interest rates for the first time since 2009 doesn't help to inspire the markets with confidence. The further easing of the monetary policy is expected from China and required from Japan and Australia. Meanwhile, the US stock markets look quite attractive. Strategically these markets are again favoured since the speculative demand for the Asian assets has subsided. The stability of the Asian growth is now questionable. The strength of recovery in the USA is also doubtful. But with the equal uncertainty at and out of home investors prefer to make closer-to-home investments. Thus, the markets remain cautious and the euro cannot tear itself away from the 1.30 level. A lot of traders report on a bunch of orders around the 1.2970 level, breaking of which may trigger a dramatic decline.
EUR/GBP
Activity in EUR/GBP gains momentum. The pair is still formally trading flat, but the fluctuation range has widened significantly since last week. The mini rally in the euro gave the currency a boost in this pair as well and didn't let the latter go below 0.82. Now trading is held at the upper boundary of the corridor, around 0.8250. The cable is also trading sideways around 1.5870. Just like the euro the pound fell under selling yesterday, but following the euro rally it rose above its 200-day MA. Today we have the release of the British Consumer Price Index on the agenda. The average market forecast promises a slight acceleration of inflation to 3.5% against 3.4% in February. Here we can see some surprising turns of events. In case of the sharp inflation slowdown the Bank of England will get more room for maneuvering and will be able to extend the asset purchase programme in May more than expected.
USD/JPY
The dollar/yen is going down the steps: consolidation is followed by a dip from which the pair is pushed down to new lows. Yesterday's local low made 80.29 and now the pair is trading at 80.40. However, it has the potential to rewrite yesterday's low in case of further attacks on the euro and stronger demand for safe assets. The current rate cuts in India, the expected cuts in Australia and easing of the monetary policy in China – all this reduces the demand for yen funding. In addition, the local companies have now less cash in hand due to the decreased incomes.
AUD, NZD
The aussie again doesn't feel well. AUD/USD has come close to 1.03 once again. The external factors don't allow the Aussie-bulls to gain strength. There is a feeling that soon the pair will continue its movement in the downward corridor. NZD/USD has also resumed the sideways trend after an unsuccessful attempt to break it up last week. Now trading is held at 0.8160 and the decline target is around 0.81. Are the bears really so strong this spring that the corridor will be broken down?
