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A good day to you.

I hope your weekend is coming along well so far.

The week was a big whipsaw as the EUR/USD climbed and tested the previous high of 1.5140+ as circled and ended the week just below the bullish trend.

I said during the last weekly review that since the bullish envelop was pushed higher to 1.5140+ , we may see more of it. Indeed we did visit the high of 1.5140+.

The main highlight of the week was the Non-Farm Payroll report and it clocked in much better than expected. At a mere -11 000 versus the expected – 119 000. This suggests that the US economy may be recovering and hence the US Dollar strengthen. As many speculations were towards the bullish side, the sudden drop in the EUR/USD probably caused stop losses to trigger, adding on to the bearish momentum. The pair eventually closed around 1.4844+.

I mentioned in the EUR/USD Daily Review that the present trading theme apparently rewards the good developments in US as a signal for risk seeking. This tends to cause the US Dollar to weaken as traders sell the currency for higher yields. The reaction in this session of the Non-Farm Payroll was contrary as the US Dollar strengthens instead. Thus i am speculating that the recent sell off of the US Dollar may be caused by the lack of confidence in the US Dollar, rather that the confidence in the EURO. The drop of Gold prices seems to validate this as traders sell off their Gold for riskier assets.

There are quite a few speeches and importance releases stacked up next week. ECB Trichet and FED Bernanke will be making appearances early week and be ready for unexpected spikes as traders react to their comments. US trade balance and unemployment claims come Thursday while the US Retail Sales, US Prelim UoM Consumer Sentiment and an appearance again by ECBTrichet, Friday. These are important events and may affect the price. Other releases are due too and you can find them in the Economic Calender below.

While bullish forces may attempt to regain the bullish trend by targeting the support turned resistance line at 1.4900+, the S&P 500 seems to have stalled around 1100 and close monitoring should be done. Any breakdown in sentiments may bring out the bears for an attempt to overcome the strong support of 1.4800, opening up 1.4730+ for grabs. Gold may serve as a clue too as a halt in it’s ascend may suggest that 1.5140+ is the turning point thus marking the end of the bullish trend since March 09.

The week ahead seems bumpy due to the numerous appearances and releases. As usual trade safe and never risk excessively. Embark on my Proper Money Management Series here and learn to manage risk.

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