EUR/usd
Bernanke and fomc's meeting minutes arranged a roller coaster attraction for the markets yesterday. Since the speech of the Fed's head to the Congress was the main event of the day, before it the markets had been quiet, gradually selling the dollar and purchasing income assets (now probably only stocks belong here). The US currency started falling more intensely when Bernanke mentioned that if the stimulus was curtailed too soon, it might hamper the labour market. The stock market hit new highs and eurusd shot up to 1.30. However, it failed to consolidate there as then followed an avalanche of selling, which we warned about before ( though yesterday we spoke about the possible reach of 1.3030). The bears did their best to prevent an upward break of the 200-day MA. The meeting minutes, which were released a bit later, didn't help as investors saw in them hints at the reduction of stock purchases. Last night the negative sentiment grew due to the poor statistics from China, where the HSBC Manufacturing PMI dipped below 50 for the first time since October. The tide of discontent all in all washed away about 1.5 %. It's also important here that the downward reversal in the pair was confirmed. Besides, the potential that the stock indices will fall is great as they have climbed too high for the current economic situation. Albeit only by the end of the month, but the old omen – sell in May and quit the market – may prove to be right. The next important support level for EURUSD is likely to be seen at 1.2750 and further at 1.2650. It's too early to speak about the possible drop of the pair to 1.20, though this scenario has now a good chance to develop.
GBP/USD
The sterling didn't try to give any false hopes and kept falling gradually. The disappointment with the decline in inflation was followed by yesterday's message about the decrease in retail sales, which turned out to be bigger than expected, and the MPC meeting minutes, which showed that by May the number of doves in the Committee has decreased. With such a news background gbpusd has come close to testing 1.50. It only remains to wait until the second GDP estimate for 2Q. If the actual data are below the initial estimate of 0.3%, it is hard to imagine anything that can stop the sterling from falling to the area of March's lows at 1.48. Below them there is an abyss with the lows at 1.42, which were last seen in 2010.
USD/JPY
usdjpy repeated the fate of stock exchanges, tumbling by over 2% after hitting a fresh high. Yet, in the pair with the Japanese currencies it was the highest level since October 2008. Of course, the final word rests with the officials of this country, but we will venture a remark that appreciation of the yen since this moment is likely to change into a flat.
AUD/USD
The aussie, once the darling of all hearts, now seems to be the main whipping boy. AUDUSD has already declined to 0.96. The feeble attempts to go up at the beginning of the week have ended up in total failure. The pair entered the zone where it was eagerly purchased last year and the year before last, but this time it may be allowed to fall a bit lower. The nearest target is 0. 9570 and further only 0.9400.
