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Hirose Financial UK Ltd. - hirose.com

Weekly news 27 Agustus 2012

<Euro/Dollar>
The prime minister of Greece didn't mention about 2-year extension and just stand to his promise, making no effect on the euro. Clearly the rise of the euro was caused by closing of sell positions after breaking 1.2400, as there is no good news to the euro. Though it stopped rising at 1.2600 and started fluctuating, if Greece cannot cut its spending, a new round of financing will be ceased and the chance of default will increase. It is better to keep selling the euro.

Expected Range: 1.2300-1.2700 Sell on the rallies
 
Dollar/Yen
The rise of the dollar was stopped by high limit of daily Ichimoku cloud, 90 and 200 days MA (at 79.500, 79.308 and 79.247 separately), and the highest was 79.67. As many on FOMC favored early easing of no sustained growth, the possibility of QE3 increases again and the dollar fell to 78.30. However, since the Japanese government may intervene at 77's, even if the dollar is sold for actual demand from 79 to 80 yen, it is unlikely for the dollar to fall below 77. Since FOMC minutes this time is sort of out of date, and some data indicate that U.S. economy is recovering, early QE3 seems impossible. Accordingly, if the possibility of QE3 decreases, the dollar will climb again gradually.

Expected Range: 78.000-79.850 Consolidating and rebounding
 
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Hirose UK Weekly News 3 Sept 2012
<Euro/Dollar>

Ben Bernanke's speech to the Federal Reserve Board led to a fall in the dollar to 1.2637 against the euro, but Greek the problem remains an obstacle. "Chance of euro zone collapse is 50-50" said the Slovak PM (that's confidence for you!!). Buying the euro is becoming risky, and it is better to take profit ASAP. There is still a significant amount of net short Euro positions in the market, but from a technical point it looks like a positive trend is appearing, and may have futher to climb; it broke the high limit of daily Ichimoku cloud, and is trying to break through 90 days MA.

Expected Range: 1.2425-1.2750 Buy the euro on rallies
 
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<Euro/Dollar>

Although Germany opposed the decision, the ECB kept its benchmark interest rate unchanged and has decided to buy unlimited amounts of short-term government bonds. Thus, the euro was sold on profit taking and it fell from 1.2652 to 1.2561. After that, however, as investors realized that the plan is good for southern Europe, the euro skyrocketed. An under-whelming U.S. employment rate which released soon afterwards led the euro to reach 1.2818. While the trend is now euro buying, we are looking at 1.28-1.29's becoming a ceiling.

Expected Range: 1.2650-1.2950 Buy on dips and take your profit firmly.
 
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