EUR/usd
The single currency was being purchased on Friday as if along a ruler. The euro/dollar was growing strictly within the narrow upward channel. It speaks not only about presence of big buyers, accurately picking up the pair, but also about absence of any idea in the markets. The pair remains in the grip of uncertainty of the ECB's policy. Despite the inflation slowdown, in Germany as well, most members of the Bank's governing board treat a rate cut or any other easing of the monetary policy as a certainly pernicious thing with economic growth in the background. Anyway, market participants keep neglecting the QE reduction by the US Fed. There is some sense in this, as despite the reduction of the programme size, the Fed's balance continues growing, while the ECB's one keeps shrinking by means of the voluntary weekly returns of the three-year LTROs by the banks. The situation can be changed by a more hawkish sentiment of the Fed, which will bring the rate increase closer. However, there are no signs that the Fed's rhetoric has changed. Thus, the euro/dollar may continue fluctuating without a trend, remaining in the power of the short-term trends, aroused by speeches of the officials. The liability to the short-term trends causes much stir in the charts, thus forcing adjustment of the technical analysis. Anyway, in the grand scheme of things the main target remains the same – closure of the gap formed two weeks ago. In the morning the pair was nearly put under pressure in the attempt to break the short-term uptrend, however soon the bulls gained the upper hand and in an instant took the euro/dollar up to 1.3875. As you remember, formally the gap will be considered closed at 1.3884. Once this level is hit, short-term players should be very careful about their stakes for further growth.
GBP/USD
The bulls speeded gbpusd up to the new five-year high of 1.6850. The sterling refuses to correct on the strong economic statistics. As a matter of fact, the CB's officials have nothing to say against the pound's strength as the rate is far from the historic highs and besides there seems to be no significant harm for the country's economy. Though we are sure that the damage will soon be inflicted and slowdown will become obvious, still there is no sign for selling yet. Caution is necessary only on reaction to the FOMC's decision on Wednesday and to the US employment data on Friday.
USD/JPY
The pair started the week on a cautious note since the geopolitical tension increased again. However, the positive movement of the EU exchanges easily made up for that. Now trading is again held at 102.20. The Japanese retail sales data published today have two sides. The positive one is impressive growth of sales in March. However, it is obvious that the Japanese made these purchases in anticipation of the sales tax increase. Such growth of activity is sure to spill over into a big decrease next month.
AUD/USD
The aussie has returned to 0.93 this morning. The Australian currency hasn't recovered yet after the sell out caused by the poor CPI. To offset the effect of that decline the pair needs to go above 0.9370.
