Saturday, August 15, 2015

Action Insight Weekly Report 8-15-15

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Action Insight Weekly Report Markets Snapshot

Dollar Reversal Case Building Up after China Induced Volatile Week

China's devaluation of its currency was the main theme last week and rocked the financial markets. An important interpretation of the move was the more serious than expected trouble that the country's exports were facing. Slowdown in the economy could be even worsened further by the stock market crash back in July. Aussie and Kiwi ended the week as the weakest major currency due to its close trade tie with China. Meanwhile, even though, crude oil extended recent down trend and made new six year low, Canadian dollar was relatively less affected. Weakness of the Loonie was indeed overwhelmed by dollar as there were speculations that Fed would delay September's rate hike. Meanwhile, European majors ended the week generally stronger with Euro being the strongest.

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Featured Technical Report

EUR/USD Weekly Outlook

EUR/USD rose to 1.1213 last week but couldn't break through 1.1215 resistance and treated. Initial bias is neutral this week. At this point, we're favoring the case that consolidation pattern from 1.1466 has completed with three waves to 1.0807 already. Further rise is expected as long as 1.1023 support holds. Above 1.1215 will target 1.1436/66 resistance zone. On the downside, though, below 1.1023 minor support will dampen this bullish case and turn bias back to the downside for 1.0807 again.

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The Week in Review and Outlook

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