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| Action Insight Weekly Report | Markets Snapshot |
Dollar Stabilized after Compromise on Tax Cut Extension, But Remains VulnerableDollar's selloff halted last week and the greenback recovered after US President accepted to extend the tax cuts on higher income individuals, dividends, capital gains and multimillion dollar estates for the next two years, which was a compromise with the Republicans. The news was a boost to the greenback in two ways. First, it's believed that the tax cut extension will provide additional boost to economic recovery, which will in turn ease the burdens on Fed to complete its $600b QE2 program, as well as the need for QE3. Secondly, the fear of worsening budget deficit prompted selloff in US treasuries which pushed yield sharply higher. USD/JPY is the move sensitive pair to yields and rebounded strong from intraday week low of 82.33 and is back pressing 84.39 resistance. |    |
| Featured Technical Report | |
EUR/USD Weekly OutlookEUR/USD engaged in choppy retreat from 1.3437 last week. The corrective structure suggests that rebound from 1.2969 is not over yet and another rise is in favor. Above 1.3437 will bring rise resumption. In such case, 1.3447 resistance should be taken out and that would confirm that fall from 1.4281 has completed with three waves down to 1.2969, just missing 100% projection of 1.4281 to 1.3447 from 1.3785 at 1.2951. EUR/USD should then target 1.3785 and then 1.4281 high. We'll favor this bullish case as long as 1.2969 support holds. |
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The Week in Review and Preview
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