EUR/usd
Friday ended with quite an unexpected drop of the euro. As a result, last week's performance looks rather puzzling. On Wednesday the single currency tried to break below the support line of the upward channel. However, already on Wednesday the powerful spurt upwards made it clear that the fall was false and that the purchases of the pair on the dips could be resumed. But it is not all that simple. On Friday, after a fruitless attempt to hit 1.24 (the highest point reached was 1.2381), EUR/USD reversed down and at some point hit the low of 1.2288. By now the pair has corrected its losses a bit and is trading at 1.2330. Let's redraw the support line through the lows of July 24, August 2 and 16. Thus we get that the single currency is trading within the channel, although is at the lower boundary of it. Anyway, the greater part of the moves is not worth considering, even going out of the familiar trading range shouldn't be regarded as a sign of reversal. The trade volumes in the exchanges are very low even by the standards of August. Yet this August hasn't brought anything new to the markets. The decision on the legitimacy of the EU bailout funds (the hottest issue of this summer) has been postponed. The debates over the US fiscal policy (the major market driver a year ago) are also far from being held. There's nothing certain about the further QE from the Fed (this is what moved the markets two years ago). The situation is aggravated by the fact that there aren't any significant releases of macroeconomic statistics scheduled for today. Perhaps, the only thing that deserves attention is the auction of short-term French and US bonds. The 3-month French bonds have demonstrated negative yields since July, but this state of affairs should change soon. Besides, on the global scale we are approaching the period of price growth in the commodity markets, which will boost inflation and as a result will lead to higher bond yields. The yield of American bonds has been growing for about a month. In fact, this all is not connected only with growing expectations of further QE or improvement in the economy: lately we've received many moderately positive signals, which reduce the probability of the former, but are still weak to speak about the latter. Besides, the growth of US bond yields is also caused by expectations of speedy inflation on the higher petrol prices and higher cost of agricultural products due to the drought.
GBP/USD
This summer GBP/USD has hit the 200-day MA three times and three more times closely approached it. But still the pound hasn't managed to break through this important level. While the single currency was trying to return to its trading corridor, the sterling was fighting the 1.5720 level, which the above-mentioned line is passing through. Like in case with the euro, the break proved to be unsteady and on Friday the pair again sank below 1.57. At the end of this week the second estimate of the British GDP will be published. Since the release of the first one we've seen many positive reports on the UK economy. Economists expect a slight upward revision of the indicator from -0.7% to -0.5%. There is a great room for surprise and on the whole the release can have a strong influence on the trend of the sterling. But the GDP statistics are to be released on Friday. Won't we see any trend before that time?
USD/JPY
The absence of a trend has suddenly ceased to be a problem for the yen. USD/JPY has been confidently growing since the beginning of the previous week. And already since Tuesday the pair has been above the resistance line, which formed at the end of July and persisted till last week. Now trading is at 79.45. The pair didn't move against the trend even on Friday, when traders usually take their weekly profits. Let's wait for the further development of the situation. Anyway, in the short term the pair needs a slight correction.
AUD/USD
The aussie has also decided on its trend. The currency is no longer that attractive and is currently hitting fresh lows against the dollar. It is not a frequent case when the Australian dollar feels bad when the stock markets grow and the price of gold gets higher. The Aussie has already suffered corrections during the summer rally and the pair has already sunk by 2.5% a few times to go up again. But then the events developed much faster – the correction lasted for three days. The drop by 2.5% from the high of 1.06 will drive the pair to 1.033. The last week's low was 1.04. Aussie-bulls still cherish some hope.
