How Low for the Euro?

The euro (EUR) continues its gradual decline against the US dollar (USD). The pair touched a six month low at 1.2825 before correcting slightly to 1.2850. The single currency, which had already been sliding due to weaker European growth prospects slid even further after last week’s blunder by European policy makers. Two are certain questions asked by investors at the moment. Is a euro now in Cyprus worth as much as it is in Frankfurt if you cannot do the same things with it? (Think Capital Controls) And does that mean that Cyprus is the first country to have already de-facto exit? Lastly do you trust European policy to have the capacity to bolster growth?

  • Gold (XAU) moved below 1595 dollars and ounce as demand for the precious metal eases due to higher returns on equities and other riskier assets.
  • The US 500 (SPI) is pushing to break its record highs at 1558 as American corporations edge ahead. The index of America’s largest companies has gained substantially since the beginning of 2013 amid better than expected earnings from US companies after years of losses.
  • Weekly option volatilities for the EURUSD steady at 9.25 shows investors’ fears subside and keep options’ premiums lower.

  

Movers & Shakers

USDJPY

The US dollar (USD) picked up versus the Japanese yen (JPY). The pair moved to lower lows touching 93.57 before recovering to 94.70. As Japan’s new central banker, Kuroda, outlined the options for monetary easing which may help the yen edge lower. We may see the pair reverse and move to higher highs.

   

Outlook

EURUSD Pivot Point 1.2895 with a preference to go SHORT at 1.2895.

Sentiment is 43% of deals to buy EUR

USDJPY Pivot Point 94.25 with a preference to go LONG at 94.25.

Sentiment is 41% of deals to buy USD

GBPUSD Pivot Point 1.5185 with a preference to go SHORT at 1.5185.

Sentiment is 64% of deals to buy GBP

AUDUSD Pivot Point 1.0445 with a preference to go LONG at 1.01445.

Sentiment is 58% of deals to buy AUD

GOLD Pivot Point 1603 with a preference to go SHORT at 1603.

Sentiment is 73% of deals to buy GOLD

OIL Pivot Point 94.85 with a preference to go LONG at 94.85.

Sentiment is 76% of deals to buy OIL

US 500 Pivot Point 1538 with a preference to go LONG at 1538.

Sentiment is 21% to buy US 500

UK 100 Pivot Point 6300 with a preference to go LONG at 6300.

Sentiment is 19% to buy UK 100

   

Calendar

GBP - UK Current Account at 09:30(GMT) Forecast -12.8B

CAD – Core Consumer Price Index m/m at 12:30(GMT) Forecast 0.3%

OIL – US Crude Oil Inventories at 14:30(GMT) Forecast 1.5M

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