Saturday, June 21, 2014

Action Insight Weekly Report 6-21-14

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Action Insight Weekly Report Markets Snapshot

Fed Sent Stocks to Records and Weighed Down Dollar, Canadian Dollar Shone

Dollar ended the week generally lower except versus the Japanese yen and Aussie even though Fed continued with tapering of the asset purchases. Markets seemed to have ignored the slight upward revision on FOMC member's rate forecasts, but were more focus on Yellen's message of keeping rates low for extended time. The sentiments also sent stocks higher with DOW and S&P 500 hitting new record highs while keeping long term treasury yields in range. In the currency markets, Canadian dollar was the strongest one as the upside surprise in inflation data prompted speculation that BoC would shift away from its neutral stance. The Swiss franc was the second strongest one after SNB kept policies unchanged. Sterling extended recent rally against dollar and Euro but ended the week mixed overall. Aussie was the weakest, just followed by yen.

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Featured Technical Report

USD/CAD Weekly Outlook

USD/CAD's decline from 1.1278 finally resumed last week and dived to as low as 1.0751. Initial bias remains on the downside and deeper fall should be seen to 50% retracement of 1.0181 to 1.1278 at 1.0730. Such decline is still being viewed as a correction. Thus, we'd start to look for reversal signal below 1.0730 and above 1.0608 key support. On the upside, break of 1.0813 resistance will turn bias neutral first. Break of 1.0960 is needed to confirm near term reversal. Otherwise, outlook will stay bearish.

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The Week in Review and Outlook

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