EUR/usd
Stock markets continue their upsurge. For advocates of technical analysis it should be important that eurusd closed the week above 1.3500 and even went beyond the starting level of Wednesday's correction. At the same time stock markets managed to close near the psychological levels of 16000 and 1800 in Dow and S&P 500 accordingly. It happened due to the favourable US statistics combined with rather dovish claims of the Fed's high officials. Yet, as you remember, the euro ran a correction on the comments about possible introduction of the negative deposit facility rate by the ECB and the Fed's minutes, according to which tapering may occur already at the coming meetings. In our opinion, the chances for the stimulus rollback by the Fed are higher than estimated by the market. Bernanke said that the rates would remain low for a long time after the end of QE. But already the current economic growth rate enables decreasing unemployment by 0.1% every month or two. Thus, we are almost two-three quarters from reaching 6.5%, when, as promised, the fomc will think about the rate increase. And then, according to Bernanke's logic, about a year should pass before the policy is tightened. There's some discrepancy. We hazard a guess that already in December there will be a trial cut in the stimulus programme by 10-15bln a month. This course of events can be ruined only by poor employment statistics for November, which will be published a week and a half before the Fed's decision. In case with the ECB, here we expect that the Bank will take up a soft stance, especially if the single currency remains expensive in the coming days. Draghi hardly expected such levels, when cutting the rates in November with reference to inflation. The euro's appreciation will continue putting the downward pressure on prices and, what's important for Germany, impede export competitiveness.
GBP/USD
Last night the sterling grew to 1.6240 against the dollar, which is just 10 pips from the important resistance, which didn't yield twice in October and which for four times has been the starting point of a reversal. Strictly speaking, the reversal took place slightly higher, but already at 1.6250 the sterling felt quite unsteady. So, the struggle before Thanksgiving Day is likely to be fierce. As a rule, after this holiday and till the New Year day the market is really volatile.
USD/JPY
Unlike the cases with the euro and pound, it seems that movement in the yen has already started and it will be hard to stop it in the coming days and weeks. With growing markets in the background, the pair hit a new local high at 101.50. The next important level is quite far away, but at the same time it is of bigger importance for the pair. The level of 103.50, which the pair reached half a year ago, is a five-year high. Besides, against the euro the yen has already reached a four-year high. Here 138.30 is a significant resistance, which is 60 pips away from the current market price. Bulls at least will want to test this level in the near future.
AUD/USD
The upsurge of stock markets and depreciation of the yen drew attention of traders away from the aussie, giving it a chance to have some rest from selling and form the basis at 0.9150 – at the lowest levels since late September. Unfortunately, the current consolidation is hardly more than merely a break for rest. Since April the pair has fallen approximately from 1.06 to 0.89, then retraced to 0.9730 and now, as it seems, it is aiming back at the yearly lows.
