According to recent statistics inflation dropped to 0.8%, what is beneath the lower boundary of the regulator, which is 2%. Nevertheless there was good news: an abrupt growth of retail sales by 1.4% and positive statistics on overall European composite PMI.

The past meeting has become the first one after Latvia joined the Euro zone. In the beginning Draghi repeated his words about inflation, which’s supposed to remain on low levels further on.

He also mentioned that the situation on the markets was fine, but contingencies are not ruled out, what could force the ECB to perform more actively. Among potential risks Draghi mentioned toughening of conditions on monetary markets, and also deterioration of inflation state.

EUR/USD

After recent rally the Euro is consolidating. It is trading in the narrow range approximately between 1.3637 and 1.3687.

GBP/USD

The Pound is apparently recovering after recent abrupt fall. The short term bias is bullish. Support is near 1.6357. If it is not crossed, prior trend is not likely to resume.

U.S December jobs report that came out Friday revealed a weaker-than-expected hiring pace for the last month of 2013. Despite the disappointing numbers, the markets closed mostly higher in volatile session.

The Labor Department said Friday that the U.S. economy added 74,000 jobs, while the unemployment rate dropped to 6.7% from a prior reading of 7%. This was the smallest increase since January 2011 and far below market expectations for an additional 196,000 jobs.

In the week ahead, investors will closely monitor U.S. data on retail sales, inflation and consumer sentiment, as well as speeches by two Federal Reserve officials on Tuesday.

The European economic calendar is pretty light in the week with only The Eurozone Industrial productions as well as its Inflation report are expected.

GOLD/USD

Gold futures rallied sharply to end at a one-month high on Friday, after disappointing U.S. non farm payrolls data reduced concerns over a further reduction in U.S. monetary stimulus.

The U.S markets as well as their peers from Europe soar on Tuesday after mounted expectations for an additional stimulus measures by the European Central Bank.

The Commerce Department enounced that the U.S. trade deficit narrowed to USD34.25 billion in November from a revised deficit of USD39.33 billion in the previous month.

At the close of U.S. trading yesterday, the Dow Jones Industrial Average rose 0.64%, the S&P 500 index rose 0.61%, while the Nasdaq Composite index rose 0.96%.

The European exchanges are expected to remain flat until the publication of the Euro-zone Retails sales and Unemployment rate.

AUD/USD

The Australian dollar fell against US dollar after an industry survey showed a drop in construction activity in December.

The Aussie got hit in the past few month follow a disappointing numbers out of China. China is Australia trading partner and its economies as well as their Currencies, are highly correlated.

U.S. stocks edged lower yesterday after a string of weaker-than-expected economic reports from China and the U.S. At the close of U.S. trading on Monday, the Dow Jones Industrial Average fell 0.27%, the S&P 500 index fell 0.25%, while the Nasdaq Composite index fell 0.44%.

The European exchanges opened Tuesday session flat despite data the German retail sales report that showed a rise of 1.5% in November.

Reports are expected to provide clues on how well the U.S. economy is recovering and how fast the Federal Reserve might unwind its stimulus program, which it began to taper last month.

EUR/USD

The euro rose against the dollar on Monday backed by a better than expected numbers out of Europe as well as a disappointing numbers out the U.S. service-sector activity. The Euro gains are capped due to the economic reports and publication that are expected in the upcoming days.

Last week was a slow holiday week with light volume as market participants were still on vacations or reluctant to take any stand in the last day of trading for the first week of 2014.

U.S. stocks ended last week slightly weaker. The European markets were mostly down on the new trading week, following the disappointing economic report from China and despite a better than expected PMI numbers.

In the week ahead, the Fed is to publish the minutes of its December meeting on Wednesday, while the U.S. jobs report for December is scheduled to be released on Friday. Meanwhile, the interest rate decision by the European Central Bank will also be in focus.

GOLD/USD

Gold prices turned lower on Monday, after initially rising to three-week highs as the precious metal’s sharp decline in 2013 spurred increased physical demand from China.

Gold’s gains came after the precious metal tumbled 28% in 2013, the worst yearly performance since 1981 and the first annual loss since 2000.

The first trading day of a New Year was marked by massive sales of the main currency pairs. Overall the data were moderately revised to better figures, but the EUR/USD pair ignored the indices.

Against such background the EUR/USD and the main European stocks plummeted. In Britain we’ve seen a report on Manufacturing PMI as well. The numbers came out worse than forecasted, and traders decided to fix profits on long positions.

The Yen on Thursday appreciated against the Dollar. Bulls continue to fix profits on long positions, what contributes to Japanese currency appreciation.

EUR/USD

The Euro is declining and approaching resistance at 1.3620. If it doesn’t hold the rate perhaps is going to fall further to test 1.3535. Otherwise a limited rebound will be possible.

USD/JPY

The pair is on the way down, implying strengthening Yen. If trend line is not breached, we are likely to see a bounce back up in the near term.

The last trading day of the last year has passed in a quite calm manner. The Euro and USDJPY have been consolidating near the levels 1.3800 and 105.00 respectively.

During the US trading session positive reports on Consumer Confidence in the States were released. Nevertheless any strong growth of the US currency wasn’t seen.

Investors didn’t rush to open long positions on the US Dollar before the holiday. British currency satisfied investors and finished trading on maximum levels of the year.

EUR/USD

The bias on Euro is bullish overall. Anyway the peak, which has been reached recently, looks too challenging at the moment to be tested again soon. Anyway if there is no fall below the trend line, the ascend will go on.

GBP/USD

The Pound’s general trend is upward. Immediate resistance is around 1.6600. If the rate pulls back from the line which acts as support, we might see a retracement of the rate.

The first trading day of a new trading week has passed with the US currency depreciating against its main rivals. The profitability of the US treasuries has been declining gradually during the day. And that didn’t contribute to bulls’ optimism over perspectives of the US Dollar.

Against that negative background the EUR/USD raised to 1.3800, and the GBP/USD increased up to 1.6500. A moderate decline of the USD/JPY was seen as well.

Obviously today on the eve of the New Year we are not going to have an abundance of market events. Nevertheless it is worthy to pay attention to Consumer Confidence (USA) index today.

EUR/USD

Apparently the upward trend has resumed after a rebound from the peak near 1.3900. Since on the eve of the holiday liquidity is expected to be very low, most analysts assume consolidation around 1.3800.

GBP/USD

In accordance with statistics of last 6 years, the Pound has been appreciating against the US Dollar during the last trading days of the year. Soon we’ll find out, whether Britain is able to stick to its traditions.

On Friday, the euro rallied to a two-year high against the U.S. dollar after European Central Bank President Mario Draghi said that he sees no urgent need to cut interest rates again and no signs of deflation.

The euro jumped to as high as 1.3892 on Friday before falling back. The yen fell to a five-year low against the dollar on Monday, and has plunged 26% over the past 15 months alone.

U.S. stock futures pointed to a steady open on Monday, after a record close on Thursday. Trading volumes are expected to remain light, with many markets closed for the New Year’s holiday, reducing liquidity in the market and increasing the volatility.

GOLD/USD

Gold’s prices shoot up. The U.S. central bank will start reducing its bond-buying stimulus program by USD10 billion a month in January, amid indications of an improving U.S. economy.

Gold is down approximately 28% this year, on track for its first yearly loss in 13 years and the worst since 1981, as solid U.S. economic data underlined expectations the Fed will begin curbing stimulus.

Tuesday has passed quite calmly on currencies’ market.  The US Dollar has been moderately appreciating against the Euro and the Yen. In the States the numbers have come out positive, but in conditions of low liquidity, reaction of the market was minuscule.

The Euro’s lowest point was 1.3654 on Tuesday. There was not enough strength for growth at that moment.  The Pound traders took advantage of positive statistics on real estate market in the absence of important macroeconomic statistics.

The pair GBPUSD grew up to 1.6380 and closed trading day a bit lower that level.

 EUR/USD

The Euro is on the rise. Now it is approaching the level of 1.3800, where an important resistance is seen. The ability to overcome the resistance will enable the currency to grow further. Otherwise we are likely to see a decline.

GBP/USD

The Pound continues to be strong. The rate has almost reached the peak, attained on December 18^th. If there is no rebound from that area, the outlook remains bullish.