Spotlight Shifted from Eurozone Debt to US Fundamentals, Dollar Reversed There was a shift in markets' attention from Eurozone debt crisis back to US fundamentals last week as dollar topped and reversed. Selling in the greenback intensified after disappointing Non-Farm payroll report and news that Bernanke will appear in "60 minutes" show to defend his $600b QE2 program. Fundamentally, despite some positive data over the week, the unexpected jump in unemployment rate to 9.8% raised much doubt about sustainability of recovery in US. The data also solidified the case for Fed to complete the $600b QE2 program and raised speculations that Fed might indeed need to launch QE3 afterwards. This can in fact be reflected in the fact that stocks were resilient despite the poor job data. Crude oil has even jumped to new high and edged closer to 90 level, with additional support from the selloff in greenback. Full Report Here... | 
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EUR/USD Weekly Outlook EUR/USD rebounded strongly after initial dip to 1.2969 last week. While 1.3447 resistance is still intact, broad based weakness in dollar is making the bearish view in EUR/USD vulnerable. In particular, we must consider that dollar index has already taken out corresponding support level of 79.46. In any case, initial bias remains on the upside this week for further rise. Break of 1.3447 resistance will indicate that decline from 1.4281 is completed with three waves downside to 1.2969 already, just missing 100% projection of 1.4281 to 1.3447 from 1.3785 at 1.2951. In such case, stronger rise should be seen to 1.3785 resistance first and then 1.4281. On the downside, below 1.3247 minor support will turn intraday bias neutral first. But we won't turn bearish in EUR/USD again before a break of 1.2969 support. Read more... |
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