FX Weekly Update
The rise of the dollar was stopped by high limit of daily Ichimoku cloud, 90 and 200 days MA (at 79.500, 79.308 and 79.247 separately), and the highest was 79.67. As many on FOMC favored early easing of no sustained growth, the possibility of QE3 increases again and the dollar fell to 78.30. However, since the Japanese government may intervene at 77's, even if the dollar is sold for actual demand from 79 to 80 yen, it is unlikely for the dollar to fall below 77. Since FOMC minutes this time is sort of out of date, and some data indicate that U.S. economy is recovering, early QE3 seems impossible. Accordingly, if the possibility of QE3 decreases, the dollar will climb again gradually.
Expected Range: 78.000-79.850 Consolidating and rebounding
The prime minister of Greece didn't mention about 2-year extension and just stand to his promise, making no effect on the euro. Clearly the rise of the euro was caused by closing of sell positions after breaking 1.2400, as there is no good news to the euro. Though it stopped rising at 1.2600 and started fluctuating, if Greece cannot cut its spending, a new round of financing will be ceased and the chance of default will increase. It is better to keep selling the euro.
Expected Range: 1.2300-1.2700 Sell
on the rallies
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