Market Review for May 15

The U.S. dollar softened the fervor, but remained quite popular in the environment, which resulted in a further weakening of European currencies. As a result, EUR/USD closed the trading day of 1.2880 and GBP/USD — 1.5230 in the area.

EUR/USD came under attack during the moment of release of weaker-than-expected GDP data for Germany and E-17 as a whole. The first of the indicators remain in positive territory, showing a minimal increase of 0.1% q./Sq., And the second confirmed a deeper decline of 0.2% instead of the projected 0.1%. As a result, the pair went below 1.29 to a minimum 1.2842 and closed trading near 1.2880.

Britain has pleased more positive than expected performance of the labor market. The number of unemployed continued to decline, with higher-than-expected pace. The unemployment rate fell to 7.8% from 7.9% previously. However, the Bank of England inflation report could not support the GBP, as confirmed the likelihood of further decline in inflation, which will still remain above 2% over the next two years. As a result, GBP/USD failed to show a decent building, but was kept relatively stable, noting a maximum of 1.5271 and closed at the opening.

USD/JPY yet stumbled on 102.75, above which has not been able to pass for the whole of yesterday. However, a couple of well-entrenched above 102 and aiming for 103 in anticipation of a decent catalyst.

Forecast for Thursday, May 16, 2013

The fact that the two largest economies of the E-17 are beginning to falter, should get the ECB to embark on a more radical action. If the measures implemented by the Bank of Japan will start to bear fruit in the near future, it may make the European authorities to hurry. Thus, the EUR/USD straight road to the south, especially given the likelihood of phasing out QE3 Fed. Now, pay special attention to the comments from ECB officials. Any hints will help to push the pair below 1.28.

The UK economy continues to delight. A series of recent events all over assures us that the central bank need not rush to the stimulation of the economy. And the fact that the growth forecast was raised from 0.9% to 1.2% for 2013, only confirms this. Once the USD will give up the slack, GBP/USD will break through near-term resistance (1.5260) to 1.53.

Despite the relatively weak data from the United States, USD/JPY unable to hold above 102.00 and even noted a maximum of 4.5-year-old, albeit with a subsequent correction. Today it is worth paying attention to a series of reports from Japan: Q1 GDP and the weekly report on capital flows are of particular importance. Last week we learned that Japanese investors for the first time in 6 weeks turned to foreign bonds. Should this trend continue, the pair will continue to go up to at 103.00. With GDP will be more difficult: economic indicators suggest the recovery, but the trade deficit may spoil the picture. We continue to adhere to the bullish sentiment.


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