Last week was one of high activity in the markets as the US Dollar continued to record new highs against most of the major currencies in the world as we expected since mid-Jan this year.

We expected the European currency to drop from 1.4400 with a target of 1.3200. It is currently trading at around 1.35, it's record lowest level against the dollar since May 2009. With already a drop of 900 pips (6.25%), we are still expecting more downside in the weeks ahead to a target of 1.32.

The main reason for this bearish move in the Euro is the Greece Deficit crisis. Increased financial risks in the EU will force the ECB to keep its monetary policy as is. This will leave them unable to commence the selling of the treasury purchases and the withdrawal of liquidity from the markets, thereby avoiding increased risks to the economy. This continues to add more pressure on the Euro in the next period.

As for this week, our view remains as is, we're looking for 1.3360 as a weekly target and 1.32 as a medium term target.

The British pound reached our long term target at 1.5000 in less than a month and a half, which is a drop of around 1400 pips (8.53%) since we advised our investors to short sterling at 1.64.

The main reason of this down move in the Sterling is the BOE leaving the door open for more treasury purchases. Furthermore, this week the markets are awaiting the BOE rate decision and QE purchasing facility. We think that there is a chance that the BOE will inject additional liquidity to purchase more Treasuries, leading to more pressure on the Sterling in the next period extending its losses towards 1.48.

The USDCHF has been trading in a sideways trend for the last two weeks as the SNB continues to intervene to stop any down move in EURCHF. This move has caused the Swiss franc to continue to trade between 1.0700 and 1.0850. We are looking to see the USDCHF breaking out of this range trend with a target of 1.0890 as a weekly target.

Gold prices continue to trade within our expected trading range of 1125 and we are still expecting not to break above 1130, which represents a solid resistance. Our short term targets remain at 1090,1080 and 1070, and our long term targets remain at 1020 for March.

Finally, we would like to mention that the GFC Markets Analysis team is one of the best market analysis teams in the world led by our Chief Mid-East Market Strategist Mr. Nour Eldeen M. Al-Hammoury. Everyone who has been following him on twitter @ twitter.com/nhammoury , has taken note of his advice and tweets about the markets. The information provided represents the GFC Markets Analysis Team and its Inter-Market Analysis Method.