FXstreet.com (Barcelona) - Market volatility has declined sharply during the last 12 months, according to the VIX index, which lies at one year low at the moment, and recently broke below the 200 week moving average.

The trend is clearly negative, according to Karen Jones, technical analyst at Commerzbank, who advances the possibility of further decline, to May 2008 lows: This is clearly negative and means that a slide towards the 15.82 May 2008 low is now on the cards. Interim targets come in at 18.64/28 (Aug. '08 and Dec. '07 lows.

On the upside, Jones points out to 29.56level to negate bearish outlook: Only a (not favoured) rally above this level -October 29.56 rejection high- would negate our bearish outlook and lead to the 33.00 area and then 33.84 (200 day ma) being eyed.