EUR/usd
In the absence of any significant news trading in the markets is usually nervous and technical levels of support and resistance become particularly important for traders. Since neither Europe nor the USA didn't publish any important statistics yesterday and are not going to release any today, the market, being left to itself, is drifting in the corridor of 1.3300-1.3370. This range can't be called very narrow, but note that since the end of Thursday the market has jerked to its bounds and stayed there for a while, preferring to return to the area between 1.3325 and 1.3355. As there are no important events scheduled for today, the markets may continue to trade in this mode this day as well. But be careful, at such moments the market may all of a sudden set out in one or the other direction, being pushed by the avalanche of stops in the course of electronic trading. The markets' attention will be mainly riveted on the Fed's meeting minutes, which are scheduled for release tomorrow evening. They are expected to indicate the FOMC's confidence in the economic growth and hints about readiness to curtail bond-buying in the near future. Since the market is expecting this already in September, the hints should be transparent enough, otherwise players will start to revise their expectations, selling USD and purchasing assets of higher income. In the meantime, the financial press are full of premonitions of the market crash once the stimulus rollback starts. However, it doesn't resemble those daring warning comments three years ago. Already in spring 2010 many staked on the policy toughening, but that proved to be a mistake as the USA had to provide additional incentives to increase the demand. Now commentators speak about reduction of bond-purchasing with a note of fatality in their voices, preparing themselves and the markets for the inevitable decline. You know, it is like when you rush full speed and realize that it is already too late to brake before a sudden obstacle.
GBP/USD
Unlike the euro, the sterling is heading up: Thursday's high was 1.5650, Friday's one was 1.5655 and yesterday it was 1.5672. Yesterday's growth was called into question by the drop of the housing price index from Rightmove by 1.8% in July. Anyway, a 5.5% increase in the yearly growth rate of the same index and the preceding strong macroeconomic indicators and growth are more than enough for the pound to demonstrate positive performance, not only against the dollar, but also against the euro and the yen, as was observed yesterday.
USD/JPY
The yen is getting more and more popular against the decline of the US stock exchanges, which in its turn pulls down the Japanese markets. Yet, it should be mentioned that the current correlation is much weaker than that a few years ago. For example, S&P 500 has already dropped to its 6-week lows and the yen rate is far even from breaking through the lows of the end of the previous week.
AUD/USD
The aussie once again was given a jolt from its own CB, which called the exchange rate an important constituent of the monetary policy, which is able to support the growth of the economy, now facing a sharp decrease in investments into natural resources. The CB says it is considering the future rate cut as a necessary step, as opposed to the previous claims regarding the “scope” for the rate cut.
