Market Review for March 28

Despite the long-awaited opening of the Bank of Cyprus, which could bring the endless queues of depositors eager to withdraw their money, the currencies have been relatively quiet. Euro remained depressed, and even found a pound of force to recover. As a result, EUR/USD closed at 1.2820, and the GBP/USD — 1.5190 at.

On the morning of EUR/USD came under new sales after the sad data from Germany. The fact that the unemployment report confirmed the first increase in the number of unemployed since last October. If even the largest economies in Europe are beginning to feed signals (recall and performance PMI), is what to expect from the whole region. However, positive data on retail sales and the limited reaction to the opening Cypriot banks still neutralized the negative. As a result, the couple from the opening level of 1.2778 to 1.2754 has weakened, but recovered in the area of ​​1.2830 to a close of the trading day.

GBP/USD held fairly briskly, which contributed little and economic data. Published index of activity in the service confirmed the increase of the maximum in the last 5 months of growth. Despite the fact that the index rose by 0.3%, traders used it as a reason to renew the demand for a couple. As a result, from the opening level 1,5124 GBP/USD rushed to the maximum 1.52, in which the pair and completed the day.

USD/JPY was trading on Thursday rather low, keeping within the 30-point range most of the session. Kuroda’s performance did not impress markets. Despite the decline in repatriation flows, supporting the yen in recent weeks, the couple can not find the strength to continue to grow even to the nearest resistance level.

Forecast for Friday, March 29, 2013

So we have lived up to Friday, so you can calm down a little and think about what would happen to us next week, as today the big moves on the currency market, we are not waiting. The fact that almost all of Europe, and even Canada celebrate Good Friday, so that trading volumes will be limited. Of economic releases hard to pick something particularly important, so that a peaceful consolidation during the last trading day.

I would like to touch on a topic that may play important in the foreign exchange market in the medium term. Please note that recent reports from Germany indicate growing weakness of the largest economies in Europe. Just last week the index of business activity in the manufacturing sector has slid below the 50-point mark. Today, it would seem, a stable labor market, the number of unemployed declined steadily since last October and January of this year, in February, the level remained unchanged, and in March surged to 13,000.

Against the background of instability in the peripheral economies, sudden engine failure as Germany may lead to serious consequences for the entire region, and, therefore, undermine the position of EUR. Thus, despite the fact that at the moment we can not rule out the probability Pullback EUR/USD at 1.2920 area, the medium term, we expect the next wave of sales currency. And this time, the breakdown of 1.27 can still take place.

In GBP/USD has the potential and the immediate goal is almost reached by 1.52. We doubt that the pair will continue the recovery today, but next week, do not rule out the breakdown of this resistance and target 1.5260. Movement will be restrained, because at the moment the only driver pair is playing on the contrast with the euro.

Inability USD/JPY recovered against a background of a favorable environment, says only one thing — the market is tired of talking and waiting for action. Abe, Kuroda and Co. have said anything that could move markets, but higher pair is not. Have to wait for the next meeting, where you can see the first attempts to implement promised. Furthermore, an additional impetus to the growth of the pair can be and publication next week of data on the U.S. labor market. Recent data indicate a strong recovery jobs. After the breakdown of the mark 94,80 USD/JPY can take a course to the nearest resistance 95.00 and then 95.30.


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