EUR/usd

25 EU banks failed the ECB's stress tests, carried out at the end of the previous year. The regulator, anyway, notes that over that time the banks have improved their financial health. The Italian banks are in the worst position – there 9 banks failed the ECB's checks and 2 banks need to build up the capital. Altogether the banks have to increase the capital by €25bln, half of which has already been gained by the banks by now. Though the results didn't show a sudden improvement of the banking system, market observers and participants took the results with cautious optimism as they often take steps towards a more open market. Remaining in obscurity, some supposed that the EU banks could need twice as much money to pass the test and it means that now we should see a bit more optimism regarding the banking system. In its turn, it can become a small advantage for the euro. Why small? It's because the banks are still reluctant to issue loans  and corporations with increased caution are staking on the future demand growth as well as consumers -on growth of their earnings. Moreover, this week there will be another meeting of the Fed, which is expected to put an end to QE3. So this event can overshadow the modest optimism aroused by the recovery of the EU banks. While there is no other news, the single currency is trying to resume its growth against the dollar and managed to reach 1.2700 during the Asian session. But in the meantime, we should understand that the preceding local highs are too far away. They are at 1.2830, to reach which there should be some important news. It can be a release of Ifo Business Climate.

GBP/USD

The British pound has been purchased with caution for two days in a row. Honestly speaking, in view of the favourable performance of stock exchanges we could expect a more vigorous growth. However, the sterling is affected by the inner factors like poor consumer demand against wage stagnation. Yet we shouldn't expect inflation growth in the near future – either from consumers (due to the deferred demand) or from producers (due to the decline of commodity prices). Now the pair is trading near 1.6100 and bulls will have to do their best to get to the preceding high of 1.6200. 

USD/JPY

After the impressive growth last Thursday, the end of the week was flat. The pair was plying between 107.85 and 108.25. Now the pair keeps moving in the same fairway, though near its lower bound. If bears manage to push the pair below 107.80 while the dollar is depreciating, the further decline can be much faster. 

AUD/USD

The flat trend of the aussie is much more continuous than in case with the yen. With the lower bound at 0.8680 and resistance above 0.8800 the pair has been moving within the channel more than four weeks. Because of that and also of the earlier continuous upward and downward trends, the Aussie remains a perfect choice for investors, preferring long-term strategies rather than intraday trading. In the current situation we wouldn't recommend to stake on the bounce off the channel bounds, instead our advice is to join the movement beyond the channel.