EUR/usd
On Friday the single currency came up against the resistance at 1.30. The pair once again failed to pass this key level, so we are still staking on the bearish scenario of events. While the United States is about to start a cycle of the policy toughening (now it concerns only the stimulus pullback), Europe is still in limbo – the situation is mainly influenced by exterior factors here (affairs of the USA and China). Europe is unable to get out of recession on its own. It's sad that this situation is already treated as normal. Germany's final GDP for the first quarter didn't weaken the single currency, though its major constituents, besides Private Consumption, proved to be worse than expected. These statistics create an impression that the business sector was extremely cautious at the beginning of the year. However, the latest data by Ifo for May showed that now the situation is improving. The decline of February-April has changed into growth: the main indicator of business climate has grown from 104.4 to 105.7. As has been observed before, this growth, if steady, will be a sign of economic improvement in the third quarter. Yet, the previous growth of the index from October 2012 till February 2013 was enough only to provoke a 0.1% rise in the first quarter. With this fundamental background the ECB may freely cut the rate and /or take other measures to soften the monetary policy without fearing an inflationary surge. In the short term the euro will resume knocking against the resistance at 1.30, as the stock market is not going to decline further due to the low liquidity (today is a holiday in Britain and the USA).
GBP/USD
The British pound also has its unyielding resistance. gbpusd has been unable to conquer 1. 5140 for the last few days, though the chart shows a series of weaker and weaker downward retracements. In other words, there is some support forming within the short-term uptrend. The break through this support can make the bears' positions stronger, provoking another move to 1.50. The only news of interest now is growth of the yearly rate of inflation in the real estate industry. As reported by Hometrack, the price growth in May will make 0.45 y/y. The major growth driver is still London, where prices have risen by 0.9%.
USD/JPY
Friday's retracement in Nikkei was followed by the drop at the end of trades, which has resumed today, causing purchases of the yen and selling of the dollar. usdjpy dropped below 101 last week, but today the pair also stays close to this mark. We firmly believe that in the coming months growth in the pair may be spurred only by strength of USD, while the Japanese officials will talk less about weakening of the national currency rate.
AUD/USD
The aussie took another attempt to plunge below 0.96 this morning. It failed to do it in the slow market, so we shouldn't expect that the previous lows will be hit today as players in the key markets (the USA and Britain) are on holiday. Probably, speculation on jumping above 0.9640 with very close take-profits and stop-losses will bring success today.
