Daily Market Review - 09/04/2014

EUR/USD

The Euro is bouncing from the support line. The pattern suggests an upward trend at least in the near term instead of consolidation. So short term forecast is bullish.

USD/JPY

As expected the asset is down. Now we can see that it catches its breath. Nevertheless it doesn’t change much in the general outlook, so the bias is bearish, and we expect to see continuation of the asset decline from 105.30.

GBP/USD

Support line doesn’t seem to be up to the challenge in order to stop the downward pressure. The slowdown has a bearish inclination anyway. Thus the trend is expected to continue.

Market Overview

If the crisis hasn’t nor returned, then approach of hard times becomes more and more obvious with every new release of statistics. And there is a difference between current events and events the beginning of the debt crisis. Then trigger of all the events were problems in the periphery of the EU, now difficulties in the biggest economies of the EU come into play.

Resumption of recession in Italy has become the sign of absence of recovery in the EU. Negative dynamics of German GDP in the second quarter also have become unexpected, as all recent years positive data from Berlin have pulled European statistics. The problem was in the situation in France, where GDP shows zero dynamics two quarters in a row and somehow avoids recession.

The socialist government couldn’t fulfill its election promises. During Hollande’s reign the amount of unemployed has increased by 500K, and his rating dropped to 20%, what is the minimum level for the whole post war period. That’s why opposition already openly calls for Hollande’s resign.

Moreover, there is a serious break up within the socialist party. After the abrupt critics of his policy for continuation of detrimental spending cuts, the former minister of finance has lost his job.

If things continue to go on like that, then socialist party might simply be deprived of significant part of its electorate, what will definitely be used by the head of national front. As we’ve already seen populist slogans are always popular within large groups of people, especially during the crisis. So there is no wonder, that recent sociological surveys suggest strengthening of Le Pen.

Economic Calendar

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