EUR/usd

The long holidays did good to the markets. This day began favourably for the Asian exchanges. Due to their growth the previous losses of the euro (the decline to 1.2880) have been recouped and the pair has returned to 1.2930, where it was trading yesterday at the end of the day. It's also worth mentioning that in the meantime S&P 500 has hit the support and stocks are in demand on the drop below 1650. Is it possible that the market was consolidating after the previous tide of growth last week and will start growing again now? In theory, yes. Formally, the indicators are no longer overbought, new players joined in the selling, which may extend the growth for a while. However, from the fundamental viewpoint, it is quite dangerous and unwisely to buy stocks at these levels. Instead of being a good month for selling, May is at risk of becoming the best month both in this and the previous year. This year the US indices  have been growing every month. Apparently, there's need for a correction or at least for consolidation. It may happen in summer, traditionally characterized by the lack of big players. For this reason, be cautious with bullish trades – the situation may change sharply due to only a couple of comments from officials. The only news of interest today is the release of the CB Consumer Confidence, which is expected to show the biggest growth since last November.

GBP/USD

The pound feels a bit better than the euro, though it is not strong enough to appreciate against the dollar. gbpusd is now at 1.51 and at night plunged to 1.5060 for a while. Looking at the longer time span, we see that the fight for 1.51 in the last few days was nothing more than consolidation within the downtrend. The pound is partly supported by the fact that in the first quarter the economy was growing against the slowdown in the eurozone. But it is reassuring only in the short term, as the country is still unable to pass from stagnation to growth. 

USD/JPY

It is hard to differentiate between a reason and a consequence in the markets. According to the news feeds, the current weakness of the yen has given rise to the impressive growth of Nikkei, but it can be quite the opposite. The stability of the US stock markets (they are purchased on the dips) helped to inspire confidence in the good prospects of stocks and spurred selling of the yen as investors seek income assets. 

AUD/USD

Just like the stock indices the aussie received support on the drop to 0.9600 (last week's low). The currency will remain oversold in the short term and the most reckless may try to purchase the Aussie, but it is important to be cautious with purchases in the inflated stock exchanges. Should heavy selling fall upon the markets, the Aussie will probably be one of the most injured.