By TraderVox.com
Tradervox.com (Dublin) – The dollar has continued with declines against major peers in the market as Bernanke announce the QE3. The euro gained as the German Court ruled in favor of the European Stability Mechanism increasing the demand for risk in the market. Last week was dominated by fundamentals as the market reacted to economic reports. Here is a quick analysis of what happened and what to expect this week.
EUR/USD: the cross went beyond the 1.30 level, after the court ruled in favor of the ESM and as the dollar weakened on Bernanke’s announcement of QE3. This week, there are sentiments that the European issues are improving and the dollar has been debased in the previous week. Spain and Greece are the major concerns this week and this might keep the cross just above the 1.30 level. However, there is a possibility of correction after a strong euro rally hence it is wise to proceed with caution this week.
GBP/USD: the pair started the week at 1.5991 and climbed to 1.6256 as it broke resistance at 1.6247. The pair reclined to 1.6210 at the end of the week. With strong UK reports expected this week, the pound is will continue with its upward trend this week. US data this week are expected to fuel the upward trend of the cross as the market digest the quantitative easing announcement.
USD/JPY: the pair opened the week above the support line at 78 and fell deeper into 77 levels as the yen strengthened. However the dollar strengthened at the close of the week as speculation of BOJ intervention emerged. The pair closed the week at 78.38. As the pair is influenced by the US yields, it is expected that more investors will be investing in the dollar as fears of intervention from BOJ continues. The market will be looking at the Bank of Japan as it meets this week.
USD/CHF: the pair started at 0.9454 and went up to 0.9483. The pair then dropped sharply, reaching the level of 0.9239. It closed the week above the support line at 0.9250 at 0.9262. The sentiments on this pair give a bearish outlook on the pair.
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