Weekly Market Review 7 of May
OVERVIEW

At the beginning of the past week the ministers of the European Union in Brussels didn’t set any basic principles of bank regulation. The main discussed issues were the sufficiency of bank capital and the implementation of the law tightening bank operations. The main events were the meeting of the ECB, the decision on interest rates and Draghi’s press conference. The rates were not modified and Draghi didn’t say anything new.  There was a surprise for the Aussie from the RBA when its rate was downgraded during the meeting because of the inflation slowing down. In the USA the pace of growth of the production activity increased to 10-month high. On Friday the report on employment was issued and it aroused a quite mixed reaction.

CURRENCIES

EUR/USD

Last week the Euro depreciated against the US Dollar from 1.3282 to 1.3080.  The break below the Resistance level of 1.2994 will mean the beginning if closing long positions on Euro. In such a case the goal will be 1.2550. In current situation the scenario of the rate going in the opposite direction is not excluded as well. But nevertheless the more likely scenario for the Euro is the continuation of the general downward trend mainly because of the debt crisis in Europe.



GBP/USD

Last week the Pound depreciated against the US Dollar from 1.6301 to 1.6140.  The Resistance is at 1.6750. But it’s not clear whether the buyers will be able to continue the race. We need to wait for the end of correction. Analysts believe that the Pound is able to continue growing.