Talking Forex Weekly Outlook - 05/03/12

EUR/USD
The pair which settled last week with a loss of around 300pips is expected to remain under pressure this week in spite of the fact that this week’s ECB press conference is expected to see Draghi do his utmost to reiterate that despite the balance sheet expansion at an unprecedented pace, price stability mandate remains key for the Bank. Also, last Friday’s revelations that the Spain’s deficit this year would be 5.8%, rather than the agreed target ratio of 4.4%. As noted by the Economist: The commission says it wants to double-check the numbers. A senior source in Berlin puts it more bluntly: “everybody knows the Spanish are lying about the figures. In terms of technical levels, supports are seen at 1.3186 (Feb 21 low), followed by 1.3115 (Feb 17 low) and then at the 55DMA line at 1.3066. On the other hand, resistance levels are seen at 1.3300/33 and then at 1.3357 (Mar-1 high).
GBP/USD
The never ending Greek debt saga is expected to remain the dominant force behind the price action and given number of looming deadlines gives reason to believe that risk averse tone may prevail. Of note, this week the MPC are due to conduct another monetary policy meeting, however the fact that the central bankers only recently voted to expand the Asset Purchase Facility (APF) leads to believe that no new announcements will be made this time round. In terms of technical levels, supports are noted at the 10DMA line at 1.5847, followed by 1.5801 (Feb 28 low). On the other hand, resistance levels are seen at the 30Day Upper Bollinger Level at 1.5970, followed by 1.5993 (Feb-29 and 2012 high).
USD/JPY
After posting a modest gain of around 50pips last week and settling in the mid-81.00 region, there is a risk of another leg lower on the back of renewed fear surrounding the Eurozone debt crisis. In terms of technical levels, supports are seen at 81.40/09. On the other hand, resistance levels are seen at 81.77, 82.09 and then at 82.23.