Euro Approached Its Resistance at 1.35 - 28.1.2013

Euro exchange rate vs. the US dollar has been held near 11-month highs amid growing optimism among market participants and good economic data that came out last week. Here we have the improvement in business sentiment, rising consumer confidence and the strong data on manufacturing activity in January. In addition, as it was reported on Friday the European banks are actively return money borrowed from the ECB during the crisis that is showing that the worst of times for the European countries are already left behind. As a result, EURUSD on Friday reached 1.3478, stopping in front of a key resistance area around 1.3500 (highs in February of last year). The Japanese yen remains under pressure. The USDJPY currency pair reached this morning the next local maximum at 91.24, and we would not be surprised if it is not the limit of growth. On As it was announced on Friday that the CPI fell in December by 0.1% in annual terms, while the deflation has been lasted for seven months. To fix the problem the strong and massive monetary policy easing is required, so the downfall in the yen seems quite plausible in the medium term, even in comparison to the current values. The EURJPY currency pair is also assaulting new heights. British pound also losing ground, quickly approaching 1.5700 against the US dollar. The UK economic growth statistics in the fourth quarter of 2012 was published Friday. The index fell by 0.3%, compared with the results of the third quarter. If the first three months of 2013 as the result will be negative - the economy will sink in recession for the third time in four last years.