EUR/usd
The market optimism on the Cyprus deal was supported only by the hopes that that scenario would never happen again. And we warned from the very beginning that, quite the opposite, the bailout of this small island could serve as an example for the further bailouts (if they will be needed). We warned, but couldn't even suppose that it would be avowed by one of the high-rank officials of the EU so soon. It was done yesterday by the Dutch Minister of Finance and President of the Eurogroup Jeroen Dijsselbloem. The euro-optimists once again were punished. eurusd sank by more than two figures from 1.3050 to 1.2830. Now trading has slightly stabilized and is held around 1.2870. Failures of the single currency affected most of the markets, but to a much smaller extent. Despite all its attempts to hit a new gobal high S&P Futures fell under the selling pressure because of the euro yesterday afternoon. The index closed at 1548.75 just four days before the end of the month, the record close for this month was set in October 2007 at 1553.50. The stock-market bulls are testing the support, but don't yet dare put an end to consolidation and resume buying stocks. In our opinion, it may be a signal of the possible reversal of the market soon or of its sharp correction. It's very unlikely that in our totally globalized world the US and Japanese stock markets can storm the highs while the single currency is on the decline for more than two months. One of the trends should eventually get the upper hand.
GBP/USD
The British pound also suffered from the concerns about the intentions of the EU officials, but not as much as others. The pound lost about a figure, falling to 1.5150 for a while, but then pulled itself together. Now trading is held around 1.52 against the dollar and EURGBP is now a step away from the two-month highs at 0.8470. It's quite possible that the downtrend of the pound has come to its end and the British currency is reversing. Already now we can see a clear reversal on the charts against the dollar and the euro.
USD/JPY
Now we are finally getting notion of what Kuroda's monetary policy will look like. The BOJ seems to be aiming at interest rate cuts further along the yield curve by means of buying longer-term government bonds. In Kuroda's opinion, it is sure to help to combat deflation. The yen traders didn't start to purchase the pair on this news. The pair is still quoted at 94.15.
gold
Gold is consolidating around $1600 per ounce. The bulls managed to bounce off the support at 1560 and tore off this and last year lows. Taking into account, in our opinion, the overpriced US stocks and preservation of the soft monetary policy, this instrument has quite a good chance to grow in the coming months. Yet, now it's hard to asset if the gold bugs will be strong enough to bring Gold above $1800/ounce or not.
