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MARKET UPDATE 17.06.2013

2013-06-17 04:25 GMT

Dollar Outlook Next Week Hinges on Bernanke

The month of June has proven to be an extremely volatile period in the forex market as the U.S. dollar fell aggressively against many major currencies. Unfortunately we can't expect the markets to calm anytime soon with a heavy dose of economic data expected from countries around the world. The U.K. and Australia will release monetary policy minutes, the Swiss National Bank will hold a monetary policy meeting and of course - we also have the Federal Reserve's monetary policy announcement on the calendar. In addition to these event risks, Eurozone PMIs, New Zealand GDP, UK retail sales, US manufacturing data and Canadian retail sales are also scheduled for release. Yet there's no question that of all these events, the most important will be the Fed meeting. Much of the volatility in the financial markets has been caused by the uncertainty of Fed policy. There's been a lot of talk about tapering asset purchases, which has caused stocks to weaken but at the same time, central bank officials and noted Fed watchers have stressed that a reduction in Quantitative Easing does not equate to tightening. They are absolutely right and we think that the rest of the market is beginning to realize this connection as well but based on the reaction to Jon Hilsenrath's article this week, there are still a subset who need convincing.

The outlook for the dollar this week will largely hinge on what Bernanke says at his post monetary policy meeting press conference. The central bank is not expected to alter its Quantitative Easing program but they will release their latest economic projections and provide clarity on their future intentions. We will be talking about the Fed all next week but in a nutshell with U.S. bond yields on the rise, we expect Bernanke to stress the different conditions needed for tapering vs. a rate hike. He will remind everyone that even if they decide to taper in a few months (a benchmark many Fed Presidents have used), they are still a long way from tightening monetary policy and the outlook for the greenback will depend how much this point is stressed. As for their forecasts, there's a mild chance that the Fed could downgrade its GDP estimates.-FXstreet.com

24h

All. G8 Meeting

2013-06-17 09:00 GMT

EMU. Labour cost (Q1)

2013-06-17 09:00 GMT

EMU. Trade Balance n.s.a. (Apr)

2013-06-17 12:30 GMT

USA. NY Empire State Manufacturing Index (Jun)

2013-06-17 04:55 GMT

EUR/AUD testing 1.3850 support on Euro weakness

2013-06-17 04:02 GMT

EUR/USD dips to fresh session lows ahead of G-8

2013-06-17 02:23 GMT

USD/JPY extends gains above 94.50

2013-06-17 00:49 GMT

Aussie pops above 0.96 USD

AUDUSD
0.96203 / 210
NZDUSD
0.80834 / 842
USDCHF
0.92362 / 372
USDCAD
1.01579 / 584
GBPJPY
148.732 / 748
EURCHF
1.23089 / 099
GOLD
1389.75 / .02
SILVER
22.00 / .04
EURUSD HIGH 1.33573 LOW 1.33184 BID 1.33187 ASK 1.33191 CHANGE -0.16% TIME 08:14:08

OUTLOOK SUMMARY

Neutral

TREND CONDITION

Sideway

TRADERS SENTIMENT

Bearish

IMPLIED VOLATILITY

Low

MARKET ANALYSIS - Intraday Analysis

Upwards scenario: EURUSD trapped to the consolidation phase. Local high at 1.3358 (R1) offers a key resistance level. Break here is required to take the pair towards to initial targets at 1.3379 (R2) and 1.3399 (R3). Downwards scenario: Penetration below the support level at 1.3294 (S1) might maintain a negative tone and prolong corrective action. Price devaluation would then be targeting our supportive measures at 1.3272 (S2) and 1.3250 (S3) in potential.

Resistance Levels: 1.3358, 1.3379, 1.3399

Support Levels: 1.3294, 1.3272, 1.3250

GBPUSD HIGH 1.57319 LOW 1.56927 BID 1.56935 ASK 1.56944 CHANGE -0.02% TIME 08:14:09

OUTLOOK SUMMARY

Up

TREND CONDITION

Sideway

TRADERS SENTIMENT

Bearish

IMPLIED VOLATILITY

Low

Upwards scenario: GBPUSD is approaching our next resistive barrier at 1.5737 (R1) on the upside. Surpassing of this level may initiate bullish pressure towards to next visible targets at 1.5768 (R2) and 1.5799 (R3). Downwards scenario: If the price failed to overcome our next resistance level we expect market easing below the support level at 1.5671 (S1). Loss here would shift our intraday outlook to the bearish side with expected targets at 1.5639 (S2) and 1.5606 (S3).

Resistance Levels: 1.5737, 1.5768, 1.5799

Support Levels: 1.5671, 1.5639, 1.5606

USDJPY HIGH 94.837 LOW 94.098 BID 94.722 ASK 94.726 CHANGE 0.67% TIME 08:14:09

OUTLOOK SUMMARY

Down

TREND CONDITION

Sideway

TRADERS SENTIMENT

Bullish

IMPLIED VOLATILITY

Low

Upwards scenario: Upside formation is limited now to the next resistive barrier at 95.05 (R1). Clearance here is required to provide a space for a move towards to next target at 95.53 (R2) and then final aim would be 96.04 (R3). Downwards scenario: On the other hand, an element of supportive measures could be found at 94.24 (S1). Clearance here would suggest possible downtrend development towards to initial targets, located at 93.75 (S2) and 93.27 (S3).

Resistance Levels: 95.05, 95.53, 96.04

Support Levels: 94.24, 93.75, 93.27

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