EUR-USD @ 1.4247/50...Yield Differentials hurting the Euro
R: 1.4300-30 / 1.4374
S: 1.4135 / 1.1.4065-50
The Euro has been on a 4-week losing streak so far, coming down from the high of 1.5144 in late November. It is currently trading just below the 100-week MA at 1.4307 and might well dip a little further towards 1.4118, which is the 38.2% retracement of the rise from 1.2457 (Mar-09) to 1.5144 (Nov-09).
A major reason for the decline in the Euro has been the hardening of the Yield differentials between the US T-Bonds and the Euro Bunds in favour of the Dollar, on fears that the Fed would move for early monetary tightening. Take a look at
With the trend in yield differentials continuing to favour the Dollar, the Euro might lose further ground in the coming days, targeting 1.4118, or even 1.4050, the projected Max Low for the Week.
|USD-JPY @ 91.73/75...Resistance at 93.00|
|R: 92.00 / 92.66-86 / 93.00|
S: 91.35-17-00 / 90.81
Dollar-Yen has seen a strong rise since the 84.81 low of late November. It has recently risen past 91.17, which is the 21-week MA and now provides a good Support in the near term. While this Support holds, a further rise towards 92.65-93.00 is possible over the next few days. Some profit-taking pullback is quite possible from the 92.65-93.00 region.
|EUR-JPY @ 130.67/78...Moving up within broad range|
|R: 132.45 / 132.70|
S: 130.25 / 129.15
The Cross has seen strong buying on the two occasions that it has seen a dip into the 127.50-126.85 region, first on 27-Nov and then again on 18-Dec. This establishes 127 as a strong Range Support of a 127-137 Range. The market is expected to continue trading inside this range for the coming weeks, like it has been since April. Within this, the current trajectory is up, with Resistance in the 132.45-70 region. Support will be available in the 130-129 region.Given this overall outlook, one may consider buying a dip towards 129, if seen.
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