EUR/usd
Forex-bulls are getting stronger and growth of the stock market in the absence of other important news is pulling the dollar down. All through the previous week eurusd was recovering from the blow it had received on the interest rate cut at the beginning of November. But as we live at the time when interest rates around the world are close to zero, the ECB's cut of the deposit-facility rate and of the refinancing rate by 0.25bp resulted in the reduction of the currency market interest rates by just a few percent points. Thus, to achieve the necessary effect draghi will have to take more decisive policy easing measures. And now we already hear talks that the ECB may break the bond-purchasing taboo. Yet, the bank will have to invent some clever purchasing scheme to prove that it doesn't purchase bonds of any particular country. In theory, ESM bonds would be suitable here, but this mechanism has relatively modest volumes, which will make this programme very narrow and actually useless. We still believe that in a month the rate cut will spill over into a new portion of unlimited (in volume) loans to banks for quite a long period. The rate cut effect in the eurozone was quickly fading away also because the prospects of the Fed's monetary policy became less hawkish due to yellen's comments regarding the economy and her attitude to the monetary incentives. It seems that the last chances to see tapering in December were cancelled last week. Moreover, it became clear that the further steps would be less cautious. Altogether it sent S&P 500 to 1798. And this is a historic high. Despite the slight proper correction in the last trading hours of the previous week, it is still quite possible that bulls will reach the psychological mark at 1800. The stock market looks quite warmed-up before the beginning of the New Year rally. Remarkably, it cannot be said about Forex, which is far from extremums. EURUSD has been trying to return above 1.3500 for four days in a row and the only bullish signal is a series of ascending intraday lows. So, we keep waiting when the US stock market will tumble down beneath the burden and will carry Forex with it. For that the US economy should be growing strongly. So strongly that officials will have no choice to take action or not.
GBP/USD
The British pound finds it a bit easier to make its way up. Here the monetary policy is not expected to be eased in the near future. On the contrary, the BOE have drawn the forecast date of the rate increase nearer, as stated in its inflation report. Besides, the economy keeps showing its strength. Because of that, even without any news, the pound is in demand. On Friday it managed to get above 1.61 and hit the three-week high (1.6134). It is interesting to see if the pair will be strong enough to go back to 1.250 and fight again to reach the yearly highs.
USD/JPY
The pair remains above 100 and growth of US stock exchanges contributes to this. The Japanese economy is demonstrating growth, which is comparable with the US rates, but at the same time it has faced higher activity of its domestic government. Yet, it can't be helped. Fundamentally Japan has weaker grounds for growth because of the decreasing population and competition from China. We believe that the Japanese will further extend economic support, which will put pressure on the Japanese currency. It is high time for the pair to leave the four-month sideways trend and continue to hit new highs.
AUD/USD
Especially bold guys were picking up the pair below 0.92 last week. Now it seems that the bulls' positions are getting stronger, taking us back to the last week's highs (0.9380). The nearest bullish target is 0.9385. If broken, it will open the way to 0.9440 and there will be the beginning of an interesting struggle for 0.9550.
