EUR/usd
If we look at the headlines of the leading news agencies, it is absolutely unclear whether it is good or bad that Spain doesn't ask for a bailout. Last week the speculations on the high expectations of Spain's appeal for a bailout contributed to growth of the single currency against the dollar and gave rise to optimism in the markets. This morning the decline from 1.2950 to 1.29 again was attributed to the inevitability of Spain's request for a bailout. For those who are tired of this fuss we'll try to give an alternative explanation. EUR/USD is now balanced. The absence of a bailout request generates uncertainty in the market, which doesn't allow the euro to go up. The longer this uncertainty lasts the worse the fundamental indicators of the Spanish economy will be, as the banking system of the country is still in the mode of the capital outflow and government has to pay high interests on their debts. The bailout request is a potentially favourable factor, however it is not clear when it will be in place. From the technical viewpoint, the bears cannot press the pair due to the above-mentioned potential coupled with the US QE3. For this reason, the 200-day MA is a really strong support now. EUR/USD already bounced off this level on October 1 and 11. The US and EU centrobanks provided a good cover for the financial system. The major issue is the real sector of the EU economy, which may demand further actions from the politicians. The situation is aggravated by the fact that Europe's major trading partner – China – is also in trouble, cutting the consumption of the European goods (expensive cars and lathes). Europe, just like Munchausen, has to pull itself out of a swamp by its hair. However, over so many years it has proved its inefficiency in that. Thus, if the pair flies above 1.35 (very likely it will take place in the coming weeks) we'll need to look closely at the statistical data to understand whether further spending cuts and austerity programme will be necessary or not.
GBP/USD
There is a feeling that the bulls managed to gain the upper hand in the fight for 1.60. Till the middle of the last week the pair behaved as though it was glued to this mark, but on Thursday there was an impulse for buying, which led to testing (unsuccessful) of 1.61. On the opening of Monday's trades GBP/USD sank down to 1.6020, but now it again seems to be going up. The bulls have consolidated and with renewed energy will be able to break through 1.61 and further go to test the resistance of the descending channel at 1.6150.
USD/JPY
The Japanese yen was forming a pennant on the 4hr candles at the end of the last week. The consolidation in the narrow price range spilt over, as written in the textbooks, into the impulse for the further growth. Now USD/JPY is trading at 78.60. It only remains to see how real the bulls' intentions are. The pair has been unable to consolidate above 78.80 since the end of July.
gold
Gold definitely lacks confidence. On Friday the precious metal slid from 1768 down to 1741 on the opening of trades in Asia. Will the events unfold in the way it was in late February, when from the similar level of 1790 the metal reversed and sank below 1540? If so, it can be regarded as a leading indicator of the market sentiment. The reversal of Gold and oil in March developed into a sale of risky assets in May.
