EUR/USD
The euro's shy attempts to recoup its losses on Friday faced a serious obstacle. While there's no clear-cut downtrend in the pair, bulls don't seem to be very strong either. The situation looks as though below its 200-day MA the euro was sold on upward bounces instead of being purchased on the dips as it has been in the previous months. If only bulls were as strong as before, they would, most likely, take advantage of the poor US statistics, released last week. Thus, Thursday's publication of the retail sales data reported growth by 0.3% in May against the expected 0.5%-0.7%. Besides, the weekly unemployment claims again slowed down their decline. Last week both the initial and continuing unemployment claims grew instead of going down, as expected. Yet it's true that the growth is not very significant and speaks at most about slowdown of the trend rather than about its reversal. However, it is also true that such statistics won't help to strengthen speculations about tapering and rate increases in the near future. As you remember, now the markets expect that the QE will be cut by 10bln each meeting and that the rate will be raised in mid 2015. The approach of this date should support the US currency. In view of the US economic statistics, received in the recent few weeks , we hardly should expect more hawkish comments and any changes in the chosen course at the meeting this week. Besides, neither inflation (according to PPI), nor consumer sentiment don't signal about the need for quick toughening. Friday's data on producer prices pointed out shrinking by 0.2% and slowdown of the annual rate from 2.1% to 2.0%. And the UoM Consumer Sentiment dropped from 81.9 to 81.2 against the supposed growth to 83.2.
GBP/USD
With the sterling it is a completely different story. Giving a speech on Thursday, the BOE's Carney said that the Bank could start raising the rates earlier than expected by the market. If we look at the same market estimates, his words can be regarded as a hint at the policy toughening already in this year. Such words make the pound look much stronger, especially against the euro. The pound/dollar is again trying to catch at 1.69, laying the ground for growth above 1.70. In the meantime, EUR/GBP has tumbled below 0.80, which is the lowest level since late 2012. It seems that the pound-bulls are serious about pushing the pair down to the multi-year lows at 0.7750-0.7850.
USD/JPY
All the last week and half of the preceding one were going under the badge of the yen's strengthening against the dollar. Though pressure on the stock exchanges appeared only last Thursday (usually it constitutes the reason for decline in USD/JPY), the yen is in demand for some other reasons. One of them is disappointment of investors, who expected further incentives from the BOJ. The Bank, anyway, announced about its expectations of further acceleration in the economic growth. In this regard we'll scarcely see a new portion of incentives. It seems that the pair will be again affected by fluctuations of demand for the dollar, less by carry-trade and only then by the domestic economic affairs.
AUD/USD
The aussie failed to hold 0.94 last week. The profit-taking in the stock exchanged had a pernicious effect on the demand for this currency. Even strengthening of gold didn't help the Aussie. But this way or another, the current levels – the highs since April – also make quite a good disposition before the Fed's meeting.
