EUR/usd
The biggest news yesterday was the joint statement made by the finance ministers and CB heads of G7 member-countries. The leaders managed to “push” into one abstract of the text not only justification for their measures to weaken the domestic currencies, but also the hope that all the countries of this mighty handful will keep a low profile. The analysts quickly commented that they were very much upset by such reserved statements and no open call for action. It's hard to say what the markets were expecting then as all the previous comments of G7 andG20 were of the same kind. Anyway, facts are obvious. Since late Thursday eurusd has been trading with the support at 1.3350. Yesterday the pair once again managed to bounce off this mark. The daily high was 1.3470. And this is already much higher than the support set last Friday. So far the euro feels quite good, remaining close to 1.3440. This time the reason for depreciation is general weakness of the dollar rather than steadiness and pressure of the single currency. Over the last 24hr the dollar has dropped against all of its major counterparts. This day promises to be important for the greenback since it will become clear which way the currency will go – further down or still up. It will be determined depending on the US retail sales report and comments of Treasury Secretary nominee Jack Lew. All this may bring the markets back to reality. We still believe that the markets have been too optimistic and eventually will face a serious correction since there is no improvement in the real economy (retail sales are not strong despite the favourable consumer sentiment). We again see that the market can be irrational for quite a long time, much longer than investors are able to keep their money. So, we'd recommend standing aside now.
GBP/USD
Yesterday the sterling again was like the anti-euro. In the morning it was pushed below the support of 1.5640, which entailed triggering of stop-orders and a drop right to 1.5570. For a while, EURGBP again returned above 0.86, but then it came under steady selling pressure. Today analysts will scrutinize the inflation report of the Bank of England. In the November report the Bank officially announced about their dissatisfaction with the exchange rate of the British pound. This situation should get further development.
USD/JPY
Let none of the analysts show their snobbism when speaking about their dissatisfaction with G7's statement. Those who need got it right. Besides the new wave of interest in the EU currencies we cannot but mention the just started correction in the yen. The latter has grown most of its rivals since the end of the European session. usdjpy failed to consolidate above 94.0 and by now has already dropped to 93.0. This cautious tone is likely to persist right till the end of the week. Traders will err on the safe side before the g20 meeting. The previous drop of the yen over the last half year has been rather sharp. The last two months have been especially hard in this regard. So the markets need a pause. The politicians will hardly agree to continue the trend without stops.
AUD/USD
The aussie proved to be a bit stronger than expected. Yesterday afternoon it went above 1.02 (we supposed that it would be a drop to 1.0180). Now trading is held at 1.0350. Not bad. Traders are taking their profits after the grand trend last month when AUD was sold for a reason and without it. Fibonacci's levels point at the possible retracement to 1.0370. Be careful here.
