EUR/usd
So far the single currency has been keeping that very trend which emerged back in November. The corridor of a bit wider than 400 points is still in power despite several attempts of the pair to break it up. The bulls' attacks were repulsed on December 28 and on January 4. Assuming that the corridor will be still here in January, the pair is likely to be trading between 1.19-1.23 by the end of the month. It would be a natural outcome considering the business slowdown in Europe which is marked by several indicators. Let's consider one of them – PMI: the composite index has been below 50.0 since August, and though it registered a slower decline in November, on the whole it displays business recession in the region. As follows from news investors' fears are now focused on Spain. The country's authorities admit that they cannot meet the fiscal requirements set before and announce new economy measures. All this exactly copies the vicious spiral of Greece: austerity spurs the downturn which in its turn leads to non-compliance with fiscal requirements and, as a result, to further cuts. According to the Greek Prime Minister, his country is now facing an “immediate uncontrolled default.” Now heads of European governments should move forward with doubled energy to prevent another development of this scenario. The slide of the single currency in its turn may somehow support regional producers increasing the competitiveness of their products and services which is really essential at the moment.
GBP/USD
Like other currencies reacting to the demand for risk the British pound came under pressure in the second half of the week. However, in contrast to the single currency the GBP / USD isn't overwriting the local minimums, just giving up the gains of the December 30 – January 3 rally. Now the pair is again trading at 1.55. The EUR/GBP is on the contrary updating its lows. Now trades on this pair are carried out at the level of the 2010 lows, close to the 0.8240 point. If decline continues, the pair may find support only in the 0.80 area, where it was consolidating from March to October 2008. Pound bulls have reason to purchase the currency on quite positive PMI records, which remaining in the positive zone (above 50), are also demonstrating the growth to the November levels. This is good news for local purchases, but unfortunately for nothing else.
USD/JPY
The Japanese yen finished the year with massive purchases. As a result, the USD / JPY fell to 76.60 in the thin market of the first trading days of the year. But the U.S. dollar strengthening and a relative stability of the stock markets have allowed the pair to adjust its decline. According to Fibonacci levels, the movement from 78.21 to 76.60 was completely corrected at the 77.20 level, which was reached last night. Technically, the pair may continue to further decline from these levels on impulsive slackening of stock markets. However, a sharp slowdown in Japan is likely to cause the yen sales rather than purchases at the time when monetary policy is equally soft in the U.S. and Japan. The dollar is sure to evoke a great buying interest as the funding currency.
AUD/USD
The Australian currency has been sold over three trading sessions in a row after the sharp speculative upward movement on the first trading day of 2012. Bulls are encouraged by relatively positive data on the Australian economy, but bears are imposing their pressure on the AUD/USD on the overall strengthening of the US dollar and expectations of further easing by RBA in early February. The broad perspective (from 2009) allows us to expect further growth of the pair and strong support in the parity area, but in case of risk-aversion the pair may break this continuous trend and fall down, as it did in 2008.
