EUR/usd

The euro's behaviour on Friday was really unnerving. Having summoned up all strength with the help of other currencies, bulls directed all efforts to sweep away bearish positions in the pair. For a couple of hours the pair was pushed from the daily low of 1.3660 up to 1.3738 and then was accurately put back to 1.3677. Forex hasn't managed to go far from this level by now and trading is held at 1.3685. The calmness of the currency market is noteworthy as in the meantime stock exchanges suffered heavy selling. It is also true that earlier stocks felt good as well, so Friday's selling hardly means the end of the uptrend. Most likely, stocks will find their buyers, at least, in short term. In a classic carry-trade growth of stock prices goes along with strengthening of commodity currencies. Now, we don't see any correlation of the kind, so the euro rate will be more affected by the European news. In particular, today we expect the release of the Ifo Business Climate index. This respectable indicator of business activity hit the two-year high in December. Today's publication is expected to mark its further growth. If these forecasts are true, the euro may get stronger again like it did last week on the release of the excellent PMI stats. The main question is if bulls will have enough courage to consolidate above 1.37. If so, it may become a herald of further growth and another attempt to test 1.38. Having rather bearish positions in the single currency, we still have to admit a possibility of short-term upsurges, while EU news is favourable and the US one is a bit weaker than before.

GBP/USD

The pound failed to consolidate a grip on the multi-year lows on Friday. On reaching 1.6650, it came across profit-taking, which drove the British currency to 1.6470 by opening of the market on Monday. Thus, for no visible reason the pound was pushed down by almost two figures. Actually, there is a reason. Closeness of the unemployment rate to the BOE's interim threshold forced officials to answer if they expected a rate increase in the near future. And though the British stats remain relatively positive, the Committee is looking for other indicators to catch at the current ‘exceptionally incentive' monetary policy. Apparently, only the inflation threat can make the BOE consider tapering and increasing the rate.  

USD/JPY

The yen kept going through the profit-squeeze on Friday. Against our expectations the rate didn't stabilize at 103. With EU players getting more active the yen began to grow and on opening of the market today the pair went as low as 101.76. Now we already see a pullback by 90 pips, but there are some fears that in the very near future we will see another test of 105. 

USD/CAD

CAD already stopped its decline last Thursday, showing signs of consolidation at 1.1160. On Friday the sentiment for correction got stronger and now the pair is a figure below Thursday's highs. After the impressive rally in the pair, that we observed in January, it is quite logical to expect a bigger correction.