Market Volatility expected

The Non farm payrolls mix reports combined with an overall negative sentiments have made the markets uncertain of the US recovery and stalled most stock lower in the Asia and European markets. Trending lower for the US dollar with the index falling below the significant support level of 85.20 will have difficulty to call the rest of the coming weeks bullish. Some corrective actions may be seen as the week progresses simply because of lackluster volumes waiting for some fresh incentives coming from the US rate decision, Consumer Price Index and the Michigan consumer report coming this week that would make the market a little more volatile. However, we still expect an overall bearish sentiment contrary to the daily movements of the majors.

The Euro against the USD has more encouraging technical outlook as mentioned in our earlier blog and market view. On top of the monthly price reversal bar from its low of 1.1875 the weekly formation do indicate that a technically sound inverted head and shoulder's formation with significant fresh VOI will push it higher. Contrary to our opinion are the analysts who happen to maintain their outlook for a parity for the Euro against the US dollar.

The fresh start of the week would be at a slower pace since traders are feeling each other as the opening days of the 3rd quarter of the year would be a corrective for the USDX, still working below the 84.60 opening for the month of July spot and the EURUSD at the 1.2590 with an initial objective at 1.2820-50 range.

Meanwhile a more positive outlook for the GBPUSD sustaining at today's prices above the 1.5080 - 1.5195 trading range. With the austerity plans set to help the Pound maintain these levels. Basically looking at he price targets of 1.5275-1.5350 range for the week.

The Aussie is showing some promising signs of a recovery and still holds an average support price of 0.8285-0.8350 as entry levels for long trade positions as the weekly chart may hold its true levels supportive of this positions. Bias as it may seem but we shall hold this stand for a mid-term trade; as we do expect the corrective for the USD to be covered by this quarter.

For the time being the expected reports this week will provide some market volatility that may be favorable for short term scalpers and day traders.

Good Luck and Happy Trading!