In this webinar Nick will go over key fundamental events and releases from throughout the week and gauge their impact on our key currency pairs. At the same time, Fan takes a look at the technical levels in the markets and explains what key levels were breached during the week, and lays down expectations for the upcoming week.

For the USD/JPY it has been a rollercoaster of a week as it surged toward range resistance at 78.25 only to fail and fall back sharply now back to range support near 76.55. The daily chart shows the strength of price action to the downside. To start next week, if we don’t slow down and decline in volatility, the USD/JPY has further downside risk toward 76.00, and maybe even lower toward the record low of 75.55…

A soft GDP report begs an important question. Will this report make it more likely that the Fed will undertake more quantitative easing. If so, that would have the effect of weakening the USD, even when the normal reaction to soft growth data would be a move towards safety and risk aversion and therefor towards the USD. Looking at the Dollar index we see the possibility that the technical line up with a swing in this fundamental bias.

US Q4 GDP is estimated to be 2.8% in the advanced reading. The forecast was 3.0% and the previous quarters GDP was revised down from 2.5% to 1.8%. This takes the US recovery assessment a couple notches down. The market is reacting with risk aversion. We can see this in the S&P 500 futures. It was already falling from 1329.25, but was consolidating over the Asian-European session…

The European sovereign debt market continues to show stabilization as successful auctions give the EUR a lift. Also, the market is beginning to again price in the successful completion of the debt negotiations between Greece and its private bondholders. The latest person to say an agreement is close is the EC’s Ollie Rehn.