Speculative Outlook 713

With most traders and analyst focusing on the earnings reports of the major companies and banks this week; in-spite of a good showing for the year some analyst still predict a mild and slower performance for the 3rd quarter of the year. As the upcoming reports on retail sales, consumer price index and the housing sector mat still prove to be sluggish as most stocks may made some recovery from its low, the basic fundamental that is driving investors is still the flight to quality with the US dollar that is making some relief recovery from its low levels from last week's trading.

The European currencies like the Pound have been correcting from a rally that prompted the GBPUSD to move lower to the 1.4947 and currently at the 1.5077 and may continue to attempt its high range between 1.5120-1.5350 next resistance levels. this attempt would likely be achieve since the USD would only be short-lived correction. And the scenario that the EUDUSD would follow through since it has been lagging behind the GBPUSD for the past week.

The 1.2510 psychological support price would be a key level to watch for the week as the only factor driving the Euro lower is the cross rate of the EURGBP touching 0.8340 coming from a daily corrective mode restraining the EURUSD to move higher. As the more influential cross trade would streamline its movement unless new developments for the USD to go lower would come this week.

The USDJPY has been seen more in line with the weakness of the USD as the Yen losses its value more after a strong stance on the 86.95-87.01 double bottom price levels that held thus prompting the USDJPY to move higher in numbers and lesser in value as we have indicated reaching an 89.14 high and is at 88.55 correction. The question is where exactly would it go? the indicator would be a combination of the EURJPY cross as the same likely scenario would happen when it drags the USDJPY lower. So the contrary move for the USDCHF to move higher may occur within the weeks movement.

As the USCHF is currently making its corrective movement higher at the 1.0635 from a low price of 1.0480. Watch for 1.0580 to hold although, if and when it would be penetrated the 1.0380 is the next stop for this pair. Which would fall lower than the 61.8 Fibonacci retracement levels.

The most favored pairs are still the Australian and New Zealand Dollars as it has been the best performing currencies as of the past week. We still continue to hold our analysis reports from our market view indicating that there would be more room for these two pairs to further accelerate. As the Asian countries like China also maintains its stance as a better choice for investors to hold stocks compared with the United States which other analysts looks at the bigger picture at this time. since the economic conditions may falter as the 3rd quarter of the year may also be a corrective phase.

On technical stand point, 0.8350 would still be the key price figure to tolerate if one would decide to trade at the current levels of 0.8739 for the AUDUSD and the 0.7092 for the Kiwi looking at the higher range of 0.7280-0.7320 initial targets respectively. With a double bottom price levels at the 0.8314-15 from the previous weeks have been a clearer price entry as we have done last July 05 pivotal point from the chart.

As volumes still needs to build up as momentum have been slower although, there seems to have quite a pacing going on with the volatility index. This is also true with the stocks as the earnings and banks reports are just being speculated on the negative in-spite of their stronger performance for the year to date. Stay clear whenever the cross rates would drag the majors as the major players would then be present in the market place.

Good Luck on your trades and please choose wisely on the entry and exit strategies for the week. As we still expect some volatility towards the entry of the 3rd quarter has just started.