Market Review for April 15

Monday began with a negative — risky assets came under pressure from the first minute the Asian session, in response to the disappointing data from China. As a result, EUR/USD ended the day near 1.3040 and GBP/USD — 1.5280 in the area.

Thus, the growth rate of China accounted for only 7.7% as opposed to the projected 8.0% due to a reduction in consumer spending and a decline in the property market as a result of tightening credit conditions. EUR/USD easing responded immediately, as China’s economy has remained virtually the main driver of global growth. The pair opened at 1.3113 day, hit a low 1.3020, closed the day in the area.

GBP/USD is much more than react to the sad news, showing a fall from the opening level of 1.5338 to 1.5267 minimum and ended the day in the area.

News of slowing growth in China despite the alarming bells in the U.S. sent USD/JPY to new lows. Most major economies of the world fail, which can only exacerbate the situation in Europe, and cause a new wave of demand for «safe haven.» A pair of made it to the opening level of 98.18 to a minimum 95.77, ending trading at around 96.50.

Forecast for Tuesday, April 16, 2013

The world economy is going through really neluchshie times, and both States and China consistently deliver new causes for concern. Yesterday’s data on business activity and the Empire State TIC capital flows were worse than expected, which is back on the market subject flight from risky assets. Moreover, in the form of risky assets are the EUR and GBP. In essence, USD is losing ground against only JPY, and the remaining pairs, it looks much more advantageous. However, if we take the long term, once the excitement subsides, the position of the dollar will be undermined, as a way out of Fed QE is delayed until at least September, and perhaps until 2014.

To date, the EUR/USD went into sales mode, and, most of all, it will be observed during the week. Forecasts by the index of business sentiment in Germany ZEW indicate more attenuation index, which makes sense after prolonged strengthening indicator and given to the Cyprus problem, which just started talking in full by mid-March. The couple can take the next target at 1.2960 after a successful break 1.30.

For GBP/USD today is an important day. Publication of the report on inflation could determine the fate of a pair in the near future. If the growth rate exceeds expectations, it is still more certain market in delaying the expansion of quantitative easing. Thus, the couple have a good chance to get back above 1.5360.

Growth of USD/JPY at the time broke off due to the recent comments of the U.S. on ultrasoft measures the Bank of Japan. The Treasury tried to appeal to the authorities of Asian countries to respect the agreements reached at the meetings of the «Big Seven» and «Big Twenty», using only internal tools to address national problems without resort to competitive devaluations. This is interpreted as a criticism of Kuroda’s recent performance, and the yen began to rise again. Given the already existing levels, a further goal will be 95.30 after breaking 96.00.

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