<Dollar/Yen>

The market formed a daily double top at 84.00 and slid significantly after a break below the neckline at 83.00, 82.80. Speculators believe that over buying and aggressive rise of the greenback against the yen will switch on a corrective move, they have systematically closed long positions.

Due to the U.S. housing index figures, the Yen was sold significantly, triggering stop loss orders at 82. Since net short JPY of the Chicago IMM contracted from 42,380 on March 13 to 25,821 on March 20 and the significant fall happened on March 22, 23, net short should decrease even more from now on.

Therefore, stop orders on Yen selling position are reducing (they have already been executed). Though the market may possibly slide to 80.50 if it breaks below the 81.50 level, it will probably consolidate at 80.00 (the possibility of stop orders being placed at this level is low.) The 38.2% and 50% retracement of Fibonacci for the rise from 76.03 (February 1) to 84.18 (March 15) is at 81.067 and 80.105. This increases the possibility of consolidation. 

Expected Range: 81.00-84.00   Wait and see  - possible buy on dips

<Euro/Dollar>

The euro against the dollar is being sold on the rally. Even though the market fell to 1.3000 on March 14, 15, when a head and shoulder was forming, it regained a certain amount of strength to 1.3285 on March 21. A similar slide to 1.3130 on March 22 due to the underperformance of Euro-area led to it rising to1.3300 as the expectation for slowing economy reduced.

Fundamentally, however, since U.S. economy appears to be recovering with Europe stalling, it is likely that U.S monetary easing will be lifted before its European counterpart. The near term future indicates that the greenback will strengthen against the euro.

From now on, we should keep an eye on Greek issues such as the Greek election and the implementation of their austerity measures. Unless the circumstances stablise, buying euro is not a god idea.

Expected Range: 1.3050-1.3330   Sell on rally

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