Daily Market Review - 04/24/2014

EUR/USD

The Euro is still within the range pinpointed in previous analysis. Right now we see that the rate is approaching the upper boundary in an attempt to test the resistance. If the line is crossed the trend will be most likely bullish.

USD/JPY

The resistance on the upside has not been overcome. So as expected the pair is going down. Support on the downside is at 102.19. Analysts expect the pair to consolidate for a while.

GBP/USD

The rate has pulled back from upward resistance and went down touching support. From out there it has bounced back up and now it is a bit beneath the middle of the range. Near term bias is bullish while the longer term trend is unclear.

Market Overview

When politicians every day make announcement that economic recovery has been going on at full pace then people tend to start to believe in that. But if one takes a look at real state of things, then all optimism vanishes in an instant. Because of Passover holidays there are no news of particular interest on the market.

According to statistics the work force volume in Spain constitutes 22.7 million people out which every forth is unemployed. But Spaniards who continue working are barely able to make a living. The thing is that in recent years there was an abrupt decline of salaries and a lot worker had to move to short term contracts without full working day.

More over according to IMF in 5 recent years inequality of population incomes in Spain has been increasing at high pace, higher than in any other EU state. As a result current ruling parties might lack votes on further European parliamentary elections, which should take place next year.

In case if opposition gains power current economic reforms might be revised. Obviously markets are going to react on such development of events quite painfully. It is important that recent statistics has really been showing a weak growth of manufacturing and also positive export dynamics.

But inner consumption continues to stagnate. Madrid has decided to follow German path starting to establish export economy. At that the success of such undertaking is not clear, but the inner market has stopped being the source of growth. Unemployment is not going to reduce, and income growth is not seen. Consequently in case of export slowing down because of some external factors Spain is at risk to be in another crisis.

Economic Calendar

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