The Japanese could have a support from the declines of the equity market since the end of last week getting lower than 89 versus the greenback which could get the same support as a safe haven across the broad.
The single currency has fallen versus the greenback below 1.33 waiting for another ECB interest rate cut later this week and this cut is widely expected to be not less than .5%. We have informed you recently that the inability to break 1.394 again yesterday caused a break of
1.38 and stop loss triggering and even inability to stand above 1.3635 caused further selling and forming a lower high today at 1.356 and psychological break of 1.35 not the next support is at 1.33 then 1.294. For a longer time frame you can see that there is a formed lower high at 1.471 on the recent Single currency rally after the fed's cut by .75% to continue the major downward trend it has started by another failing lower than 1.44 at 1.4365 by the end of last year on the dovish interest rate outlook differential between the single currency and the greenback but after the rate cut the pressure on the single currency can go down by the profit taken on buy rumors sell on fact base specially if the cut is not more than .5% and also this depends on the language of Trichet in the press conference after the ECB meeting. You could see on the chart how the single currency has started its recent rally to 1.471 after the ECB recent meeting from 1.263 but If he stressed on the inflation dovish outlook and increased growth serious downside risks, by god's will this can have a negative impact on the single currency over the medium term.Best wishes
FX Consultant Walid Salah El Din E-Mail: snipped-for-privacy@fx-recommends.com
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