USD mixed in Asia ahead of Bernanke's speech on inflation: Markets will be hoping for clarity on the inflation outlook when Fed chairman Bernake speaks today. The consensus seems to be that Bernanke will say that he's not as confident as he once was that inflation will ease. At the June 27/28 meeting, the price index for core PCE was at 2.0% (the top of their comfort zone) and the Fed said that they still feel that inflation is the predominant risk. Investors would like to know if the Fed prefers core PCE at 1.5% or 2.0%, but few analysts expect the Fed to tie itself down to a specific target. The U.S. 10yr yield climbed higher during Asian trade, as bond markets expect the Fed to reinforce its inflation concern.


The selling point is at 2.0150; triggered by breaking the uptrend line and fail to reach higher than the previous peak of 2.0187. The market swings downwards and changes the direction of the minor trend.

Fibonacci retracement 61.8% is the take profit at 2.0067
Previous resistance represents the Stop Loss at 2.0200

To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages above the zero line pointing down. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the trend is down.

We should always look at the primary trend line; and in this example it breaks and changes its direction. For the momentum oscillator we have to concentrate at the zero line and the trend of the oscillator. Stochastic is giving us a bearish signal. Most of the indicators show us the weakness of the Sterling against the dollars and the reversal of the up trend that has happened in the last two weeks.


* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.

By Finotec’s professional analyst,
Tony B.

dealingdesk@finotec.com