Market Review for May 14

Tuesday began in consolidation mode, but at the time of the American session the European currency could break through some technical levels. U.S. Dollar Rules ball. As a result, EUR/USD closed the trading day of 1.2940 and GBP/USD — 1.5230 in the area.

EUR/USD initially behaved pretty confident, despite the disappointment of the research ZEW. The indicator rose slightly from the previous level (36.4 to 36.3), but investors had expected to strengthen to 39.5. However, the frustration of not being able to immediately call a widespread fall — it only happened during the U.S. session, and thanks to the dynamics of USD paired with JPY. As a result, from the opening pair slipped to 1.2972 minimum 1.2930, which is close to shopping and closed the day, and even a small increase in Greece’s rating has failed to restore optimism.

GBP/USD made its maximum (1.5329) during the Asian session, the output is quite positive data on the housing market. Price Balance really moved into positive territory for the first time in several years, but fell short of forecasts 1% against the expected 2%. Since then, and began to decline pairs, which led her to a minimum 1.5217 to the end of the trading day.

USD/JPY in the morning carrying a loss, but the American was able to recover the session, noting the new 4-year high of 102.39 from the opening level of 101.80. U.S. data on import prices have not made much furore in the markets, as in line with forecasts. But be on the market rumors that Prime Minister Abe of Japan on Friday will present the world a second package of measures to stimulate the economy, strengthening provoked pair.

Forecast for Wednesday, May 15, 2013

In EUR/USD is worth noting one point. The level of 1.2960 was quite difficult to break, even on weak ZEW data pair could not be fixed below, since in this area there is a large number of stops. However, during the American session it happened, and a further decline is only a matter of time. Just as in the case of USD/JPY, we know the direction and purpose of 1.28 is very real, and now we have to wait for the right time and do not lose patience.

Today, the order of the GDP of Germany and E-17 as a whole for the 1st quarter. Of course, much greater importance will be the first of the reports, which is expected quarterly growth. However, given the weakness of economic activity in the manufacturing and services sectors, as well as record levels of unemployment, the transition probability is Europe’s largest economy into a technical recession (two quarters of negative growth) is quite high. In such a case, wait for the final breakdown of 1.2960 with the primary purpose of 1.29 and below 1.2860 and 1.28 — depending on the depth of frustration.

For GBP/USD today particularly exciting day, as the data will be published on the labor market and the quarterly inflation report from the Bank of England. Recent indicators show positive trends in the development of the British economy, which could force the Central Bank «to temper justice with mercy» and to speak a little more optimistic than before. If the outlook for inflation and economic growth rate will be increased, wait for the breakdown of 1.53 with the further aim at 1.5360. However, if the numbers remain the same, it could trigger further sell the pair. The nearest strong support only 1.5130.

On the way USD/JPY are factors such as the decline in yields on U.S. securities, falling stock markets and reduce the likelihood of Japanese demand for foreign bonds. The fact that the yield on Japanese 10-year JGB rose 11 basis points, which is a fairly significant increase for these securities and may reduce the outflow of Japanese capital abroad. Meanwhile, the U.S. yields fell on Monday (further limiting the desire of investors), and if it continues on, the couple will have some difficulty in achieving 103.00. Yet, you continue to believe that this is just a pause before a new wave of growth .


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