:: The Euro Strength Most Likely as US Dollar Corrects Lower

June 21, 2012 11: 18 GMT

Retail forex traders net-short the Euro against the U.S. Dollar remain (ticker: USDOLLAR) as the pair of senior multi-week fresh presses. Use us most often as a denier indicator trade; If the commercial crowds are short EURUSD, we prefer to be long.
In view of the same unilateral manner professional trade sense, we believe that the Euro may continue to correct higher against the refuge currencies. Major traders have been placed at the worst of the results of the elections to the Greek criticism, and the victory of the pro-bailout party meant the clear dangers failed to materialize.
Currencies tend to have their ups and downs at the beginning and end of the month. These trends seasonal forex suggest the EURUSD can trade higher until June and may resume its broader tendency from the beginning in July.
How to interpret and exchange with the SSI? Watch a FXCM Expo presentation which explains the SSI.

Currencies Likely to Consolidate Ahead of Key Fed Event Risk

G20 fails to produce anything meaningful, but somewhat upbeat IMF raises fund contributions; US does not participate All eyes on today’s major event risk in the form of the Fed rate decision Markets remain very well supported and although the G20 failed to produce anything meaningful, this was not a surprise and it may have been enough that the Group maintained a strong commitment to support the global economy through government proponomics. Interestingly, the IMF’s fund contributions were raised to $465B versus 430B previous, but none of the contributions came from the US. While we wouldn’t read too much into this, perhaps the real US contribution will come later today by way of additional action from the Fed. Markets are now looking for the Fed to extend Operation Twist or even potentially offer additional quantitative easing. Any of these moves should be taken as net risk positive and could open the door for additional strength in risk correlated assets. Should the Fed however maintain current policy, there would be risk for a major reversal and risk liquidation.
ECONOMIC CALENDAR

 TECHNICAL OUTLOOK

 EUR/USD: While our overall outlook remains grossly bearish, from here we still see room for short-term upside before a fresh lower top is sought out. Look for the latest positive weekly close to open the door for acceleration into the 1.2800-1.3000 area, where fresh offers are likely to re-emerge. Setbacks should be well supported ahead of 1.2400.
 USD/JPY:The latest setbacks have been rather intense, with the market collapsing through the 200-Day SMA before finally finding support by 77.65. We have since seen attempts at recovery and we contend that the market should continue to break higher, with sights ultimately set on a retest and break of the 2012 highs by 84.20 further up. However, at this point, we will need to see a break and close back above 80.00 to officially alleviate downside pressures and reaffirm bullish outlook.
 GBP/USD: Daily studies are now correcting from oversold and from here risks seem tilted to the upside to allow for a necessary short-term corrective bounce after setbacks stalled just shy of the 2012 lows from January. Look for additional upside towards the 1.5800-1.6000 from where a more meaningful lower top is sought out ahead of bearish resumption.

 USD/CHF: While we retain a broader bullish outlook for this pair, with the market seen establishing back above parity over the coming weeks, shorter-term risks are for more of a corrective pullback to allow for the market to establish a fresh higher low. As such, we see risks for weakness over the coming sessions towards the 0.9200-0.9300 area before the market looks to reassert its bullish momentum and broader uptrend.

US dollar chart installation tips more deep losses likely to come

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Ilya Spivak, currency 29 may 2012 strategist 03: 41 GMT the takeaway: US Dollar technical positioning indicates prices are likely to get more return before the advance more large building in the past 10 months resumed the momentum.

S & P 500 - prices are testing the resistance of 1331.70 marked by the expansion of Fibonacci 123,6%, with a break exposing the level of 100% to 1347.70. Short term support is figure 1300.00, a psychological barrier, reinforced by the former resistance at the top of a broken drop channel from the top, with a lower break exposing the top swing on 27 October at 1292.90 may 1.

Daily chart - created with FXCM Marketscope 2.0

Crude oil - price formatted candlestick Harami above resistance-turned-support our heading 90.14, 7 September high fence, evoking a corrective bounce may be coming. Positive divergence in RSI strengthens the case for a scenario head. Initial resistance aligns to 92.51, a former support marked by on 16 December, low, with a thrust above this targeting 95.41 (an another former background now acting as resistance to the low February 2).

Daily chart - created with FXCM Marketscope 2.0

Gold - price will continue to consolidate above support in the region of 50 1522-1532 45. Short term trend support-turned-resistance lines to the 1584.56. A break above this limit exposes the figure of 1600/oz, followed by the top of a channel set from late February, now at 1621.73.

Daily chart - created with FXCM Marketscope 2.0

Us DOLLAR - price completed a model Breakaway bearish candlestick under 10241, level 100% expansion of Fibonacci resistance, noting that the subway is coming. Initial support lines up to the area of 10134-41, marked by the expansion of 76.4% and the October 2011 swing high. A less break on a daily basis of closure exposes the 61.8% Fib to 10078.

Daily chart - created with FXCM Marketscope 2.0

-Written by Ilya Spivak, strategist of Dailyfx.com currency

Contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @ IlyaSpivak

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May 29, 2012 03: 41 GMT

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=>> Euro Sticks to Range, but Losses Likely on Spain and Italy Troubles

Quantitative Strategist 14 April 2012 04: 22 GMT
Fundamental Forecast for the Euro: Bearis

There are three types of price trends: up, down, and sideways. The Euro remains stuck in fairly well-defined 11-month downtrend, but 2012 has produced a shorter-term uptrend, and the last 6 weeks have kept the Euro/US Dollar within a narrow sideways trend. Where's the resolution?

When there are any doubts on the short-term trajectory of a currency, we always defer to the bigger picture. for the Euro that leaves an important downtrend intact as long as the Euro/US Dollar remains below February highs of $1.3487. The EURUSD looked as though it would break through significant price resistance as the Dow Jones FXCM Dollar Index (ticker: USDOLLAR) saw its largest single-day decline in 7 weeks. Yet sharp sell-offs in European sovereign debt markets forced the Euro lower against the safe-haven US currency through Friday's close. The spread between 10-Year Spanish Government Bond Yields and the benchmark German Bund finished at a significant 4.24 percent. The substantial differential is the largest since the depths of the Euro Zone crisis through late 2011 and a clear warning of what may be to come.

Biosphere Euro Zone economic event risk will be relatively limited in the week ahead, but traders should watch out for major surprises in Euro area Consumer Price Index inflation figures and a German ZEW Business Confidence survey on the 17th. Investors remain focused on whether the European Central Bank will move to cut interest rates further or introduce other measures to ease monetary policy. Why? Interest rates matter, and lower European yields would likely push the euro lower against major counterparts. Any lower-than-expected CPI figures could boost the case for ECB rate cuts and the Euro could fall in kind.

Yet the largest issue on the horizon feels all too familiar: Euro Zone fiscal debt crises. A clearly disappointing Greek deficit report reminded traders that problems are far from over. Yet further Greek disorders mean little in comparison to a deterioration in Spain's tax scales, and the surge in Spanish bond yields warn that investors are wary. What's next?

We will need to see a significant improvement in Spanish and Italian bond markets for the Euro to make a sustained move higher. How might that happened? According to a poll conducted by Bloomberg News, 17 of 22 economists expect that the European Central Bank will restart its purchases of regional sovereign debt through the Securities Market Program. Yet, in this author's opinion, selling pressures on Spanish and Italian bonds might be too great for the central bank to overcome.

It is one thing for Euro Zone nations to band together in order to lease out Greece, Portugal, and Ireland. Yet Spanish and Italian economies and tax debts dwarf those of the smaller states, and investors are setting the stage for a real showdown on sovereign credit risk.

Keep an eye on Euro Zone debt markets in the week ahead as any clear deterioration would likely produce further Euro/US Dollar declines. What else should we watch? Correlations between the EURUSD and the US S & P 500 and broader risky assets have weakened as of late, but they will remain important for as long as the US Dollar remains the world's foremost safe-haven currency. Watch stocks-the S & P is down 2.7% in the first two weeks of the second quarter. Continued sell-offs could hurt the risk-sensitive EURUSD. -DR

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14 April 2012 04: 22 GMT Apr 07 00: 43 GMT Euro on the Verge of Another Massive Bear Leg as Crisis Fears ReturnMar, 30 23: 30 GMT Euro at Crossroads, ECB and US Nonfarm Payrolls May Set Pace for Q2Mar, 23 23: 21 GMT Euro Ambitions to Revive Bull Trend May Be Dashed by Dollar, Crisis FearsMar, 16 23: 02 GMT Euro Targets Strength as Euro Zone CalmS & P 500 Surges, VIX TumblesMar, 10 03: 38 GMT Euro at Risk as Markets Look Past Greece to Growth, Rates Outlook