EUR/usd
Having broken through 1.2840, eurusd quickly fell down to 1.2770. The main reason for this movement is triggering of limit orders on reaching new local lows. As a result, the pair is now trading very closely to the lows of the previous year (1.2744). The next accumulation of stops can be near 1.2650. The further target of decline may be set at 1.20, which had been hit in 2012 in the heat of the EU sovereign debt crisis before draghi made his famous ‘whatever it takes' speech. Then the low rate was explained by the fears of the EU disintegration with exclusion of the least solvent members. Besides, the demand for the medium-term bonds of the core countries was such that the yields of these bonds were negative. Now we can also find bonds with negative yields. Moreover, the general yields curve became lower and flatter, yet it is no longer spoken about risks to existence of the region. Also the current rate of the euro doesn't arouse any concerns among politicians (for now). Furthermore, they consider this rate to be reasonable and expect that its decline will help to spur inflation and consumer demand. Also the region obviously hopes to increase exports due to the insufficient domestic demand. However, we should understand that on the way of inflation increase there is also sagging of prices on energy and agricultural products, which is happening because of increase in production in the first case and bumper harvest in the second one while the demand is in relative stagnation. Thus, it might take much more time and probably deeper decline of the currency to produce any significant impact on inflation. The market participants are revising down their forecasts regarding EURUSD. For example, yesterday UBS revised its 12-month forecast for the pair from 1.10 down to 1.25.
GBP/USD
Yesterday the cable sank below the support line of the short-term uptrend. The demand for the dollar is tipping the scale now. By the present moment the pair has fallen to 1.6320 and here we see an important support at 1.6300. Two days ago the pair managed to push off this level and continue its ascent. But in the meantime it would be more reasonable to stay out of the market until the fate of this disposition is determined. The main trend of the pair may remain downward as the market is more sensitive to closeness of the rate increase in the USA than in England.
USD/JPY
The pair is again above 109, being close to last week's highs, which in their turn were the highs for the last 6 years. Just like in case with the euro/dollar, the main aim of the current movement is to gather stops near the preceding reversal levels. For usdjpy this level can be seen at 109.45 and further already at 110.66, which was the end of the pullback in 2008.
AUD/USD
Naturally the current state of affairs hasn't brought any good to the AU currency. Yesterday's consolidation and growth from 0.8840 to 0.8880 has spilt over into an attempt of bears to storm below 0.8700. In case with the aussie the dollar-bulls may also trigger stops near the preceding lows/highs of the trading pairs, but this way it will be a bit more difficult as the nearest considerable low is a figure and a half lower.
