EUR/usd
The US stock market is hitting new highs, albeit not as confidently as before. This craving of investors for the yield affects eurusd. We can't say that it will give rise to an ascending trend, but it is quite enough not to allow a drop in the pair. Last night the pair tried to break above 1.29. It failed, but the current position is a figure above Friday's low. There aren't any serious moves due to slack trading on Monday (most European countries had holidays) and absence of important macroeconomic news. Today this news vacuum in the euro zone and the USA still persists. The only exception is the drop of German Producer Prices, which proved to be bigger than expected in April. Yet the fact that the annual inflation rate reduced to just 0.1% is hardly surprising. The same trend is observed in many countries and regions with much stronger economies. Please remember that the German economy in 1Q was by 1.4% smaller than a year ago. The positive trends in production are just in their initial stage and their effect is likely to be felt only by the middle or end of summer. At the moment we still think it is better to sell the pair when it is on the rise.
GBP/USD
Unlike the euro zone, Britain sees a significant influence of the inflation statistics on the sterling. Today is just the day when both PPI and CPI will be released at once. In this country we can now observe quite a serious gap between the consumer inflation and dynamics of producer prices, which is largely caused by weakness of the pound. This gap will hardly get smaller in the near future as the economy will be affected by the pound's drop at the beginning of the year. Anyway, its stabilization (against the euro) is soon to be to the benefit of consumers, whose incomes do not keep up with the growth of commodity prices.
USD/JPY
At the beginning of the week purchases of the yen were active due to the remark made by the Japanese Minister of Economic Affairs that the further decline of the currency was likely to affect much the purchasing power of the population. We spoke about it earlier. Anyway, today they yen is also gradually sold in connection with the beginning of another two-day meeting of the BOJ. It will hardly bring any changes.
gold
There is a feeling that Gold is likely to make a double bottom after bouncing off 1340. This bottom appeared due to numerous messages about the growth of retail sales on the price decrease last month. Moreover, the quarterly report of World Gold Council confirmed that customers were active all through the first quarter (+12% y/y), even though manufacturers showed lower demand. Anyway, we are skeptical about the further growth perspectives and consider purchases above 1300 until August to be risky.
