Correction Of Euro Before The ECB Meeting - 5.2.2013

The single currency got under pressure on Monday and kept declining on Tuesday morning. Market participants were quick to get profits fixed after euro reached 14-month high against the dollar (1.3710) last week. Such a behavior was caused by large sales of Spanish and Italian bonds, as well as the downfall in the stock markets of both countries due to growing political uncertainty. In addition, some long positions could be closed due to the approaching ECB meeting, ending on Thursday. The EURUSD currency pair fell below 1.35 this morning. Japanese Yen has grown slightly against the US dollar and against the euro at the end of Monday trading. The USDJPY currency pair yesterday reached the highest level since May 2010 at 93.17 and now it is traded near 92.00. The EURJPY currency pair also reached its highest level since April 2010 at 126.96, but fell down around 124.00 at the end of Asian trading today. The IFC Markets Analytical Department keeps believing that the weakening potential of the yen is large enough. Our next target for USDJPY is 95.00. Note that in January, the rise of the yen was observed at the beginning of each week. And by the end of the week the yen was falling down to new lows again and again within several months. Aussie shows mixed results. Today, the pair is trading vs. US dollar around 1.04 and 100-daily moving average. No strong pressure on the Australian dollar is observed, but at the same time, there are also no reasons for the growth yet. The RBA meeting was ended today, where it was decided to keep the target level of interest rates for overnight transactions unchanged at 3%, but the possibility of further reductions during the year was not excluded.