EUR/usd
Yesterday's growth of stock exchanges helped the single currency in thin trading. While the main capital markets (Britain and the USA) were closed, stock index futures were attacking the new highs. Thus, S&P 500 not only managed to set a new record at 1900, but also to close out the day above that level. In the meantime, the technical analysis shows that this indicator is overbought. Strictly speaking, it doesn't promise an immediate reversal at these levels. So those who play against the market should be more careful. The current position of the index urges to look out for the moment when Bollinger Bands shifts from the overheated to neutral zone. This return will be a bearish signal. The optimism of the stock exchanges helped the demand for risky assets, out of habit dragging the single currency behind it. We can only guess why now, when the ECB rates are close to zero, the single currency should be referred to risky assets. Just the opposite, most of the EU bond yields are now lower than the yields of the US treasuries. And the monetary policy prospects are in favour of the EU funding, at least in case the policy is eased in June. Anyway, the market mysteriously ignores all these circumstances. It also ignored yesterday's speech of draghi, who focused on dangers of the too long period of low inflation. The euro/dollar yesterday managed to consolidate in the area of three-month lows and even to come off them, being above 1.3650 this morning. So, why did we mention the connection between stocks and the euro in the beginning? This old correlation has its reverse side. In case of correction in the stock markets, eurusd may resume its decline.
GBP/USD
The sterling was also storing confidence during the quiet Monday. The bears released their pressure in the absence of any news. Tonight it will worth listening to Carney, even though his speech (on the topic of inclusive capital) doesn't promise to shed light on the monetary policy plans. As to overbuying/overselling, gbpusd is just in the middle, which doesn't give any signal for moving in this or that direction. Globally, anyway, we expect that the pair will come under stronger pressure in connection with the awaited impulse slowdown in Britain.
USD/JPY
The pair keeps pushing off its 200-day MA, despite its sluggish reaction to strengthening of stocks both abroad and in Japan. The gradual return to 102 looks very slack as politicians instead of thinking about incentives constantly speak about satisfaction with the current situation and growing hopes for curtailment of incentives by the BOJ. What do they think? Not clear.
gold
Yesterday's performance of Gold can be explained only by extremely low liquidity in the market. In the last hour of the trading day the instrument flew up to 1295, and according to some reports even exceeded 1300. However, on the opening today it again returned to the average levels of Monday – 1292 and later fell under selling and dropped below 1290. All these shifts are of interest only because of the surprisingly low volatility of May. However, it cannot last for long. Breaking of the support at 1280 or of the resistance at 1305 promises a sharp change in the interests of the participants. Only then it will be time for more or less real gold rush.
