FX Weekly Update
A slide to 78.62 on June 15 due to the potential of QE3 was followed by a remarkable rally to 80.57 on June 22. A significant amount of selling has taken place in the 79.00-50 zone. The victory of New Democracy party gives support to cross-yen pairs and Dollar/yen at the same time (Risk Appetite). Although some new selling positions were opened from 80.00-50, others were closed from 80.35.
Technically the dollar may even rise to 81.50-75 if it can establish itself above 80.60-65. The resistance level drawn from 84's has been broken at 78.5's and the selling positions of actual demand may be digested. Buying the greenback on dips at 79.5's could be useful.
Expected Rang: 78.600-83.00 Buy the dollar on dips.
The euro has been heavy against the dollar because of the uncertainty of the Greek election, victory of New Democracy party and formation of a coalition has, however, pushed the euro down and has broken below the support level at 1.2590 drawn from June 1 to 1.2522.
Since the formation of a triple top ahead of 1.2750, euro down trend will continue. Spain's formal request for a bank bailout will lead the euro sliding gradually to 1.23000's support levels.
Expected Range: 1.2300-1.27350 Sell on the
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