FX Weekly Update
Even though the dollar stopped rising at 79.595 (high limit of daily Ichimoku cloud) last week, since it already rose above 79.200 (200 days MA) and 79.432 (90 days MA), it is better to buy the dollar. The differential between USD and Yen interest rates has also give support to the dollar. Even though there may have been significant selling orders for actual demand at 80's, the dollar may still increase gradually. As the selling orders placed by trading companies have been executed from 78.70 to 79.50, it is significant to see if selling orders placed from 79.60 to 80's will be executed immediately. The dollar may be bought from 79.132 to 78.5 (even if it falls).
Expected Range: 78.70-80.50 Selling orders from 79.5 to 80.5 may pressure the dollar, but it may climb even higher once it consolidates.
As the euro is getting heavy at 1.2450 and consolidating at 1.2250 at the same time, it is better to trade within the range. Although Draghi's Speech stimulated the market, the euro couldn't reach 1.2450 and subsequently fell back. If Germany is still opposed to the ECB's sovereign bonds buying plan, the euro will have no power to rise. However, if Germany is willing to make certain concession, the euro may break above 1.2450 and 1.2590 (90 days MA) and climb up to 1.2670 (High limit of daily Ichimoku). A large amount of closing positions may occur on Euro/Yen together with bullish dollar. It may also give certain support to the euro if the Chikou span rises over the price.
Range: 1.2200-1.2600 Trade within the
range for the moment. Depends on Germany, as the euro may skyrocket.
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