Daily Market Review 31 of May
OVERVIEW

The situation in Spanish banking system demonstrates that the debt crisis is rapidly spreading and this issue is also relevant for the EU countries with the biggest economies.  Another proof of the aforementioned statement was the result of the Italian auction on obligations’ placement. This country failed to sell the maximum planned amount of debt at the auction.  The Index of Economic Trust in the EU dropped lower than there had been forecasted. Analysts assume that the market has lost its trust in the Euro. The currency is a little oversold but the trend is absolutely clear: the prices are moving to the 10 year old figures basically to 1.1870, when the Euro was just introduced for the mass circulation. Thus people continue to withdraw their funds from their investments and savings in Euro and the trading continues in the defensive regime.

CURRENCIES

EUR/USD

Yesterday the Euro depreciated against the US Dollar from 1.2505 to 1.2361 with further bounce to 1.2374.  Apparently this is the state of the Euro being oversold. The fixation and a little correction of the currency pair are possible around 1.2553. That will be used for accumulating short positions on Euro. The goals are 1.2250 and 1.1880.



GBP/USD

Yesterday the Pound depreciated against the US Dollar from 1.5716 to 1.5474. As the crisis in Europe exacerbates the pressure on the British currency grows.  Relatively good situation in the US economy contributes to it as well. The analysts mark that the technical picture becomes more favorable for sellers. For a bit oversold British currency the fixation of profit with a light correction to 1.5620 are not excluded.