EUR/usd
The payrolls were somewhat dubious. On the one hand, the January data proved to be worse than expected, but on the other hand the rates of many previous months were revised up. Thus, it turned out that a year ago, in January 2012, the US labour market grew by 311K, while in January 2013 it added just 157K, i.e. twice as little. This growth rate lags behind the natural population growth, so it's not surprising that the unemployment should rise from 7.8% to 7.9%. The earnings keep growing at a pace slightly higher than the inflation rate, demonstrating 2.1% for earnings and 1.7% for CPI in December. After giving it some thought, the markets concluded that the reports were positive and got down to buying risky assets. The US stocks were still growing today during the Asian session. The single currency first fell under the selling pressure, but then still managed to reach 1.37. However, traders considered such levels to be too high: in a few hours the profit-squeeze erupted and pushed eurusd down to 1.3640. From the technical viewpoint, our target of 1.37 was hit. To confirm the cyclic nature of Forex movements in the post-crisis world we should expect a reversal somewhere between February and April. Yet the attempts to bring the pair up to 1.40 are also quite possible. At that time the middle- and long-term buyers will find it safer to stand aside though. In our opinion, the single currency is again too expensive to keep the country's domestic goods competitive. Now the EU economy is growing due to the preceding weakness of the euro (we've frequently drawn your attention to the trade balance improvement). This parameter should be kept in focus in the coming months. Should the single currency stay above 1.30, it will hamper the euro zone's recovery. Let's see how representatives from the EU will comment on the looming currency wars.
EUR/GBP
The sterling received no quarter. Note how different the markets moves were. The stock market moved up almost immediately; the single currency after some hesitation hit fresh highs, but then again went on the defensive. From the level of 1.5870 gbpusd had plunged below 1.57 by the end of trading last Friday and today it keeps helplessly hovering at these levels. The euro/pound tasted 0.87, apparently, in the anticipation of the further attack by the bears. Anyway, the prospects of the pair are rather negative than not. The pair has travelled from the upper to the lower bound of the 4yr downward channel for the recent six months starting with late July. We are skeptic about the possibility of further steady growth.
USD/JPY
usdjpy, as well as the US stock markets, didn't hesitate much where to move. The pair quickly turned to grow after the release. By the end of Friday the bulls even almost broke through 93.0. Now the pair is in slight correction, just as in the previous four weeks. Now trading is held at 92.60.
USD/CAD
The attitude to the Canadian dollar has changed. It is again in demand, though in comparison with other currencies, moves in USDJPY are minimal. From 1.01 on Thursday the pair fell below the parity on the favourable GDP statistics. The November data surprised with the growth by 0.3%, which hadn't been expected and seen by traders for long. If the dollar remains weak, here we may see the drop down to 0.9820 during a week or two.
