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| Action Insight Weekly Report | Markets Snapshot |
Euro Selloff to Resume after Indecisive Week, Spain WeighsTraders have been indecisive in deciding whether to sell dollar or euro last week. Disappointing job market data from US reignited the talk of QE3 from Fed and triggered some pull back in the greenback. But it's the situation in Spain that should have finally pushed traders to make up their mind to dump euro and risk assets. Late Friday's selloff in European majors suggests that the pull back in greenback is over. Yen is also having admirable resilience last month's rebound. Meanwhile, we saw DOW faced strong resistance from 13000 despite a solid rebound attempt. It looks like markets are back in risk averse mode where odds now favor more upside in dollar and yen in near term. |
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| Featured Technical Report | |
EUR/USD Weekly OutlookEUR/USD's rebound from 1.3033 was a bit stronger than expected and mixed up the outlook for a while. But Friday's sharp decline cleared the picture. Recovery from 1.3033 should be a corrective only and is finished and decline from 1.3385 is set to resume this week. Break of 1.3033 will confirm this bearish case. Further break of 1.3003 support will confirm resumption of whole decline from 1.3486 and should target 100% projection of 1.3486 to 1.3003 from 1.3385 at 1.2902 next. More importantly, this should also confirm that rebound from 1.2625 has finished at 1.3486 and larger decline from 1.4939 is resuming for another low. We'll favor this bearish case as long as 1.3212 resistance holds. |
| Special Reports |
The Possibility of Fed's QE3Speeches from Fed officials have been directing market expectations of QE3. The FOMC minutes for the March meeting indicated that policymakers saw less urgency to implement QE3 due to improvement in the economic backdrop. Yet, the Fed Chairman Ben Bernanke's speech regarding stimulus and the job market, and Vice Chairman Janet Yellen's comment that 'a highly accommodative policy stance to be appropriate' have once again sparked speculations on QE3. The current developments suggest that further QE is still likely, but only after completion of Operation Twist and upon rapid deterioration of economic growth. |
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The Week in Review and Outlook | ||
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