Weekly Market Outlook Reports By: SSFX Knowledge Center

Mr. Dhruv Williams 7/8/15 Market Research

Analyst Speak July,2015 Reports By: SSFX Knowledge Center

MARKET RESEARCH

Global Currency Market – A Technical Perspective for Traders & Hedgers

“Euro Economy Parasites Can Effect Currency Trading: Says The Seven Star FX Analyst”

Foreign Markets

Europe’s economies are benefitting from many supporting factors at once. Oil prices

remain relatively low, global growth is steady except the Eurozone crisis, the euro has continued

to depreciate, and economic policies in the EU are supportive.

On the Contrary side, quantitative easing by the European Central Bank(ECB) is highly a

significant impact on global capital markets, contributing to lower interest rates and expectations

of improving credit conditions. With the overall fiscal stance in the EU broadly neutral – neither

tightening nor loosening – fiscal policy is also accommodating growth. Over time, the pursuit of

structural reforms and the Investment Plan for Europe should also bear fruit

Outlook

The GBP/USD pair skid almost 200 pips to hit an intraday low of 1.5413 on Tuesday as

the markets turned risk averse due to the stock market rout in China and increased probability of

Grexit. The spot began its downward journey after it was rejected at 1.5606 in the early

European session. The better-than-expected Industrial production failed to provide any strength

to the GBP bulls. The selling pressure intensified after the EUR/USD pair broke below the 1.10

handle.

With no major European data available for release today, the cementry remains at the

top due to the overall market sentiment. The rout in the Shanghai Composite Market index

continues as sentiment worsened further with more than 40% of the companies suspended from

currency trading. Meanwhile, Greece has a 1 week deadline to submit a detail Forecast of

reforms to international creditors in return for a bailout or risk the "bankruptcy" of both the country

and its financial system. The risk aversion is likely to maintain its grip on the markets as we head

towards the Fed minutes due for release in the American session. The September rate hike

expectations in the US could drop if the Fed policy makers put more emphasis on the turmoil in

the global markets, although it could result in a minor correction in the GBP/USD to 1.5520.

On the 4-hour chart, the spot breached the falling channel and extended losses to hit a low of

1.5413, before closing just above 1.5463 (61.8% Fib R of June rally). The pair could drop agin

back to lower than 1.5413 (29.7% Fib R of Apr-June rally) in the early European session.

However, the RSI on the hourly and 4-hour time frame has hit the oversold regions.

Consequently, the pair may sustain above 1.5408-1.54, thereby opening doors for a re-test of

1.5460. A break above 1.5460 would be a double bottom breakout, which could see the pair

Analyst Speak July,2015 Reports By: SSFX Knowledge Center

MARKET RESEARCH

target 1.5520. On the other hand, a a failure to sustain above 1.548-1.54 would open doors for

1.5348 (76.4% Fib of June rally).

EUR/USD: Another attempt at 1.0973

The EUR/USD pair fell to an intraday low of 1.0917 on Tuesday which has gripped a fear

among the Traders with Issues in Greek Economy and rout in the Chinese equity markets, before

rebounding strongly to trade above 1.10 handle after Greece received a five day deadline to

meet creditor nod. The recovery in the Dow Jones index also helped the EUR/USD pair sustain

above 1.10 levels.

With no major data due out of the Eurozone, the Greek issue is likely to remain at the center

stage ahead of the Fed minutes release. As per the Greek government official PM Tsipras will

address the European parliament today. Meanwhile, European Council President Donald Tusk

and Commission President Jean-Claude Juncker warned Tuesday that “Failure to find an

agreement will lead to the bankruptcy of Greece and the insolvency of its banking system."

Consequently, a hard stance from Greeks/PM Tispras is likely to put the EUR under pressure.

On the hourly charts, the spot is struggling to rise above the hourly 50-MA located at 1.1018. The

recovery witnessed in the previous session was halted at the hourly 100-MA. Since then, the

hourly 50-MA has acted as a strong resistance. Consequently, a failure to take out 1.1018 could

push the pair back to 1.0994 (50% Fib of Apr-May rally). A break below the same could push the

pair back to 1.0955. On the other hand, a break above 1.1018 could open doors for 1.1050

(hourly 100-MA).

The outlook stays bearish so long as the pair trades below hourly 100-MA, which

has acted as a strong resistance since June. As per The Analyst Perspective Currency

May hit A new Low if Greece Exits the Eurozone…

Analyst: Dhruv Williams (dhruv@sevenstarfx.com)

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report is intended for non- Institutional Clients only

This report has been prepared by the Retail Research team of Seven Star FX Ltd. The views, opinions, estimates, ratings, target price, entry

prices and/or other parameters mentioned in this document may or may not match or may be contrary with those of the other Research

teams (Institutional, PCG) of Seven Star FX Ltd