Trading foreign exchange involves a high degree of risk. CitiFX Pro offers trading on margin. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should ensure that you understand the risks and can withstand the losses and that you seek advice from your advisors as appropriate.In the United States, CitiFX Pro is a service offered by Citibank N.A., New York, 390 Greenwich Street, New York, NY 10013. Citibank N.A. is an entity organized under the laws of the United States of America.Please review the Risk Disclosure and Privacy Disclosure carefully before opening an account.
Copyright © 2012 Citigroup Inc.
FX Technicals: Wednesday snapshot: Europe back under pressure and USD looks set for further gains
09.05.2012
Europe: The setup and price action on French 10Y yields is particularly concerning as we look to be forming a double bottom that points towards 3.50%. Fresh highs for the year on Spain versus Germany 10Y yield spread is also a concern. Worse still is the bear flattening on the Spanish 2’s-10’s curve. Yields in the periphery are rising while German yields are falling today.
Foreign Exchange: Watch the double bottom neckline at 80.18 on the USD Index. A rally through there would open the way for the Jan highs again. If the path of the USD remains similar to that seen in Sept 2011 (the price action is similar) then expect 84.50+ in 5 weeks. Last week’s bearish weekly reversal on EURUSD was only the third since the downtrend began 12 months ago. NZDUSD has breached the 0.7880 support level and should test 0.7370 if not 0.72.
Asia and Latam: The Asia–USD Index breaks lower and should test 114.50. We include charts of USDIDR, Jakarta Equities, USDKRW, Kospi Index, USDBRL and the Bovespa Index. In all cases the USD looks set to strengthen and Equities look set to suffer. Key levels to watch are highlighted
Note: While we have not included the chart today, we are focused on 20.9% on the VIX Index as a break and close above there would likely see higher volatility and indicate further losses for Equities. We will keep you posted as an when we see new developments there
This is an excerpt of CitiFX Research & Commentary as received in full by CitiFX Pro clients. It is provided to you only as an example of information made available to CitiFX Pro clients, and it does not contain the full analysis, conclusions, or other information found in original document.