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Citigroup: which G20 currencies outperform others Tuesday, March 13, 2012 - 08:30 Analysts at Citigroup claim that while the market players are obsessed with EUR/USD and USD/JPY, a much more profitable trade is to sell G4 majors against other G20 currencies. The specialists analyzed the average (unweighted) performance of eighteen currencies – Australian, New Zealand’s, Taiwan’s, Singapore’s and Canadian dollars, South African rand, Norwegian krone, Swedish krona, Mexican, Argentinian and Chilean pesos, Indonesian rupiah, Indian rupee, Russian ruble, Turkish lira, Brazilian real, Chinese yuan, Malaysian ringgit – and measured their performance against the average of US dollar, euro, British pound and Japanese yen. According to the bank, “G20 smalls” have the highest return relative to their realized volatility so far this year. It may be explained by the liquidity added to the market by the ECB and the BOJ which encouraged risk appetite and somewhat stabilized the global economy improving prospects for the smaller countries in the G20 and, consequently, their currencies. Buying G20 currencies is a way to limit via diversification one’s exposure to risks connected with euro. Such trade is a strong bet on the outperformance of risky assets. Citigroup: which G20 currencies outperform others // FBS Markets Inc. Be successful with FBS

UBS, RBS: EUR/USD forecasts Tuesday, March 13, 2012 - 08:15 UBS: “US payrolls data were again strong in February, with both the headline figure beating expectations and previous months' seeing decent upwards revisions. Continued employment creation at this pace makes it increasingly hard for Federal Reserve doves to keep pushing the case for further quantitative easing, especially in light of the fact that tail risks associated with the possibility of a European meltdown have been cut back materially. The ECB's successful LTRO operations and the positive Greek PSI outcome have helped in this regard.” RBS: “Less QE (quantitative easing) in the U.S. is positive for the dollar ... dollar will do better against the yen, euro and sterling. In Europe the weakest data is in the countries with the weakest fiscal position, which is worrying and it's still a case of selling euro on any rallies.” According to the bank, EUR/USD will fall to $1.26 during the next 2-3 months in case U.S. data in the coming weeks is positive. Credit Agricole: “There's a risk of EUR/USD sustaining a move below $1.31. There are worries about whether Portugal will follow Greece, whether Greece will need another bailout, whether the underlying issues in the country will be resolved.” Deutsche Bank: “U.S. growth forecasts are being scaled back even as the labor market picks up and that will weigh on the U.S. dollar” – American economic growth is expected to slow this quarter from the fourth quarter's 3% growth (y/y) as consumer spending flattened and exports remained sluggish. However, taking into account euro zone’s problems (primarily, uncertainty about Spain and Italy), the bank’s “baseline scenario remains the euro to drop towards $1.25 in coming months.” UBS, RBS: EUR/USD forecasts // FBS Markets Inc. Be successful with FBS

BMO: trading on FOMC meeting Tuesday, March 13, 2012 - 08:00 Analysts at BMO Capital recommend investors selling the single currency versus the greenback ahead the FOMC meeting later today. In their view, one should open EUR/USD shorts at $1.3170 stopping at $1.3275 and targeting $1.2875. The specialists think that the Fed’s Chairman Ben Bernanke will discourage the expectations of QE3 due to the recent favorable economic data, especially employment figures. This is BMO’s baseline scenario. However, the analysts underline that the Federal Reserve is always capable of surprises and if the central bank hints on further quantitative easing, one should try another type of trade like buying Mexican peso against the greenback. BMO doesn’t agree with those experts who advise trading emerging market currencies instead of the major ones. The bank points out that the developing nations are aggressively lowering interest rates, so the risk-on, risk-off trading patterns to which traders have got used may be altered. BMO: trading on FOMC meeting // FBS Markets Inc. Be successful with FBS

BMO: trading on the Fed’s comments Tuesday, March 13, 2012 - 04:45 Analysts at BMO Capital recommend investors selling the single currency versus the greenback ahead the FOMC meeting later today. In their view, one should open EUR/USD shorts at $1.3170 stopping at $1.3275 and targeting $1.2875. The specialists think that the Fed’s Chairman Ben Bernanke will discourage the expectations of QE3 due to the recent favorable economic data, especially employment figures. This is BMO’s baseline scenario. However, the analysts underline that the Federal Reserve is always capable of surprises and if the central bank hints on further quantitative easing, one should try another type of trade like buying Mexican peso against the greenback. BMO doesn’t agree with those experts who advise trading emerging market currencies instead of the major ones. The bank points out that the developing nations are aggressively lowering interest rates, so the risk-on, risk-off trading patterns to which traders have got used may be altered. Market Analysis // FBS Markets Inc. Be successful with FBS

RBS: analyzing GBP crosses Tuesday, March 13, 2012 - 04:00 Analysts at RBS claim that the recent strong US data is having a negative impact on the pair GBP/USD because of rate spreads and reduced probability of the Fed’s QE3. In addition, recent dynamics shows that EUR/GBP is also finding itself under pressure. UK manufacturing data released last week (+0.1% m/m in January after +1.1% in December) shows that GBP weakness isn't rebalancing the nation’s economy. It may also mean that that sterling’s decline can be structural rather than cyclical and further weakness is likely. According to RBS, GBP/JPY is overvalued by less than 4%, GBP/AUD may be around 4.7% overvalued, while GBP/NZD is estimated to be 2.3% overvalued. The specialists say that GBP/USD and EUR/GBP look fairly valued from a short-term perspective. The bank underlines that the key driving force of all GBP G10 crosses is rate spreads. The dynamics of pound versus euro, US dollar, Japanese yen, Australian and New Zealand’s dollars is also influenced by significant moves in balance sheets. As for the correlation with risk, it has weakened during the past month for most GBP G10 currency pairs except GBP/USD and GBP/JPY where positive correlations have tightened marginally. EUR/GBP has a positive correlation with risk but this has edged lower since March 5. Further worries over the solvency of Euro zone countries may loosen this correlation further. RBS: analyzing GBP crosses // FBS Markets Inc. Be successful with FBS

UBS, RBS, Credit Agricole: EUR/USD forecasts Monday, March 12, 2012 - 12:30 UBS: “US payrolls data were again strong in February, with both the headline figure beating expectations and previous months' seeing decent upwards revisions. Continued employment creation at this pace makes it increasingly hard for Federal Reserve doves to keep pushing the case for further quantitative easing, especially in light of the fact that tail risks associated with the possibility of a European meltdown have been cut back materially. The ECB's successful LTRO operations and the positive Greek PSI outcome have helped in this regard.” RBS: “Less QE (quantitative easing) in the U.S. is positive for the dollar ... dollar will do better against the yen, euro and sterling. In Europe the weakest data is in the countries with the weakest fiscal position, which is worrying and it's still a case of selling euro on any rallies.” According to the bank, EUR/USD will fall to $1.26 during the next 2-3 months in case U.S. data in the coming weeks is positive. Credit Agricole: “There's a risk of EUR/USD sustaining a move below $1.31. There are worries about whether Portugal will follow Greece, whether Greece will need another bailout, whether the underlying issues in the country will be resolved.” Deutsche Bank: “U.S. growth forecasts are being scaled back even as the labor market picks up and that will weigh on the U.S. dollar” – American economic growth is expected to slow this quarter from the fourth quarter's 3% growth (y/y) as consumer spending flattened and exports remained sluggish. However, taking into account euro zone’s problems (primarily, uncertainty about Spain and Italy), the bank’s “baseline scenario remains the euro to drop towards $1.25 in coming months.” Market Analysis // FBS Markets Inc. Be successful with FBS

EUR/USD: main technical levels Monday, March 12, 2012 - 12:00 Technical analysts at Commerzbank underline that the single currency is facing strong resistance versus the greenback in the $1.3291/1.3325 area. As long as euro’s trading below these levels, the outlook for it will remain bearish. Support is situated at $1.3095 (last week's 3-week minimum), $1.3080 (55-day MA) and $1.3050 (50% Fibonacci retracement from this year's advance) and $1.3000. EUR/USD risks dropping to $1.2974/54 (February minimum) and $1.2624 (January minimum). If the pair slides below the latter, it will be poised down to $1.2000. Strategists at Varengold Bank expect EUR/USD to close today below support at $1.3100 citing negative signals from the MACD. EUR/USD: main technical levels // FBS Markets Inc. Be successful with FBS

The Fed's policy will remain unchanged Monday, March 12, 2012 - 10:30 On Tuesday the Fed's Open Market Committee meets to decide monetary policy. The announcement of further bond buying can pose a risk to a resurgent dollar this week, but most analysts doubt that will happen. Recent stronger-than-expected February employment numbers (NFP +227K) has quelled speculation that the central bank might resort to a third round of quantitative easing (QE3) to stimulate the economy. However, an antinomy is observed: the US labor market seems do better, but this has not been matched by a rise in production, demand or consumer spending. Many analysts say the FOMC is unlikely to offer new measures to stimulate the economy, especially as the Fed continues with its "Operation Twist" effort to keep long-term interest rates low. The current “Operation Twist”, a $400bn switch into Treasury securities with longer to run until maturity, will use up almost all of the shorter-term Treasuries that the Fed has to sell and take its holdings of some long-term Treasuries close to limits on market liquidity. Bank of America-Merrill Lynch: While the FOMC is likely to acknowledge the oil market risk, as well as the general improvement in activity data recently, we anticipate the statement will still be supportive of the current easing bias. BNY Mellon: Good data will reinforce the Fed's view that what they're doing is working and they're not going to stop now. They seem determined to fight the devil they know instead of the devil they don't. The chance of an even more-dovish FOMC could once more upend the dollar. The fact that these days the dollar seems to be a safe-harbor from Europe's debt crisis may also help the dollar go up at the euro's expense. On the other hand, investors look forward to Bernanke’s announcements about QE3. The Chairman’s silence of may cause the correction. The Fed's policy will remain unchanged // FBS Markets Inc. Be successful with FBS

CFTC data: US dollar longs increased Monday, March 12, 2012 - 10:00 The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that speculative investors increased their net long US dollar position by $6.1 billion (80%) to $15.4 billion. As you may see in the table below, the greenback was bought versus all IMM (International Monetary Market) currencies except Canadian dollar and Mexican peso. The latter are supported by carry trades and high oil prices. Euro, British pound and Japanese yen are sold due to the loose monetary policy of these nations’ central banks, while Australian and New Zealand’s dollars were hurt by the worsening of China’s economic prospects. The net positions for American currency are long for 25th consecutive week, the longest period of positive dollar sentiment since 1999. Chart. Net aggregate speculate IMM position in USD (Source: CFTC, Saxo bank, Bloomberg). It’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. CFTC data: US dollar longs increased // FBS Markets Inc. Be successful with FBS

Ichimoku. Weekly forecast. GBP/USD Monday, March 12, 2012 - 09:45 Weekly GBP/USD British pound kept declining versus its US counterpart from late February minimum at $1.6000. On the weekly chart GBP/USD closed last week below the Standard line (1), which is currently acting as resistance. The prices will get support from the Turning line (2) which is moving slowly upwards. The descending Ichimoku Cloud was widening for some time, though Senkou Span A (4) has turned horizontal. As a result, if Tenkan-sen (2) and Kijun-sen form “golden cross” and Kumo starts narrowing, the bulls will get chance to reverse the trend lifting sterling to the lower border of the Cloud (4). Otherwise, the pair will keep moving lower within the current downtrend. Daily GBP/USD On the daily chart one may see that the pair’s advance stalled last month and the rate went sideways. Pound failed to overcome important resistance and prices went below both the 9-day MA or so-called Tenkan-sen (1) and the 26-day Kijun-sen (2). As a result, despite the bullish Ichimoku Cloud (3, 4), there’s no uptrend on the chart. GBP/USD is supported only by Kumo: if sterling enters the Cloud, it will likely dip to its lower border – Senkou Span B (4). At the same time, the bulls are struggling to retrace at least a part of Friday’s decline and hold the priced above the Cloud. Ichimoku. Weekly forecast. GBP/USD // FBS Markets Inc. Be successful with FBS

BofA revised forecasts for euro, pound Thursday, March 1, 2012 - 12:00 Analysts at Bank of America claim that although the single currency declined yesterday versus the greenback after the LTRO results and Bernanke’s testimony, EUR/USD prospects have so far improved. The specialists expect the market’s risk sentiment to stay elevated as the situation at the European peripheral debt markets as well as the general state of global economy improved. The bank increased EUR/USD forecast from $1.25 to $1.30 by the end of the second quarter and from $1.30 to $1.33 by the year-end. In addition, the projections for EUR/JPY were revised up from 91 to 105 yen by June 30 and from 99 to 109 yen by the end of December. Bank of America thinks that Canadian, Australian and New Zealand’s dollars have good chances for appreciation. As for British pound, the analysts are pessimistic and lowered forecast for GBP/USD for the end of 2012 from $1.53 to $1.51. Chart. Daily EUR/USD BofA revised forecasts for euro, pound // FBS Markets Inc. Be successful with FBS

Rabobank: comments on EUR, AUD, CAD Thursday, March 1, 2012 - 11:45 Analysts at Rabobank believe that the single currency will fall to $1.25 versus the greenback by the middle of May and then return to growth targeting $1.40 in the longer-term as the specialists believe that US dollar will be weakened by the Fed’s policies and economic growth slowdown. The bank is bullish on the Australian dollar and the Canadian dollar. In their view, these commodity and growth-linked currencies are helped by the success of the LTRO which improved investors’ sentiment. The analysts aren’t sure that Aussie and loonie will be able to maintain the gains for the duration of the year, but for now they seem to be supported well enough. Chart. Daily EUR/USD Rabobank: comments on EUR, AUD, CAD // FBS Markets Inc. Be successful with FBS

SocGen: China may lower GDP target Thursday, March 1, 2012 - 11:30 The National People's Congress will convene in China on March 5 and last for a week discussing the Government Work Report which will reveal the nation’s targets for growth and inflation, detail the fiscal budget and the priorities for reforms in 2012. Analysts at Societe Generale believe that the general direction of Chinese policymakers will remain the same: the nation will continue being focused on “making progress while maintaining stability”. In their view, China will reiterate “prudent monetary policy” and “proactive fiscal policy”. According to the bank, China will likely diminish GDP target to 7.5% indicating increasing commitment to structural reforms and less appetite for aggressive investment stimulus. SocGen: China may lower GDP target // FBS Markets Inc. Be successful with FBS

Commerzbank is bearish on EUR/USD Thursday, March 1, 2012 - 11:00 Technical analysts at Commerzbank think that the pair EUR/USD may have reversed downwards. The specialists claim that support for EUR/USD is situated at $1.3318 (February 1 maximum), $1.3293 (February 21 maximum), $1.3199 (late December maximum), $1.3126 (the uptrend channel support) and $1.3066 (55-day MA). According to the bank, resistance lies at $1.3389 (yesterday’s minimum), $1.3436 (50% Fibonacci retracement) and $1.3487 (February maximum). Commerzbank says that the outlook for euro will remain bearish as long as it’s trading below $1.3487. If the European currency overcomes this level, it will get chance to climb to $1.3550 (December maximum) and $1.3628 (61.8% Fibonacci retracement of the decline from October to January). Chart. Daily EUR/USD Commerzbank is bearish on EUR/USD // FBS Markets Inc. Be successful with FBS

Comments on EUR/USD Thursday, March 1, 2012 - 08:00 Today is the first day of EU economic summit. The meeting of the European leaders will be focused on the ways of reviving the region’s economy postponing the discussion of Europe’s financial-crisis firewall. Analysts at Mizuho Securities claim that the markets are still concerned about the future of the euro area. The specialists are bearish on EUR/USD expecting the pair to slide to $1.25 by June 30. The single currency dropped versus the greenback yesterday from nearly 3-month maximums in the $1.3480 area to the levels around $1.3315 after the ECB allotted 530 billion euro of cheap three-year credits to the European banks as investors were “buying on rumors, selling on facts”. Then euro was hit after the Fed’s Chairman Ben Bernanke didn’t signal another round of quantitative easing. Support for EUR/USD is currently situated at $1.3293 (100-day MA). Chart. Daily EUR/USD Comments on EUR/USD // FBS Markets Inc. Be successful with FBS

The essentials of Ben Bernanke’s testimony Thursday, March 1, 2012 - 07:45 - The Fed’s Chairman confirmed that the interest rates are likely to stay low at least until the end of 2014 as unemployment level is still high and inflation outlook is subdued. - Bernanke didn’t mention additional monetary stimulus measures like QE3. - “Gasoline prices have moved up, primarily reflecting higher global oil prices – a development that is likely to push up inflation temporarily while reducing consumers’ purchasing power.” - Comments on the situation in euro area: “if Europe has a mild downturn… and if the financial situation remains under control that the effect on the US might not be terribly serious”. At the same time, there is “significant risk” of stress and contagion from “a major financial accident”. Analysts at Barclays Capital note that US central bank is passively moving away from excessive easing approach that will be a positive factor for US dollar. According to the data released yesterday, US GDP added 3% in the final 3 month of last year (vs. the consensus forecast of 2.8% growth). Conference Board said that confidence among US consumers climbed to a 12-month maximum in February. Beige Book, regional business survey, also published yesterday showed that American economy expanded at a “modest to moderate pace” in January and early February, the main driver of the expansion was manufacturing. Bernanke will continue giving its semiannual testimony to the House Financial Services Committee. The essentials of Ben Bernanke center]Be successful with FBS [/center]

ECB allotted 530 billion euro to euro zone’s banks Wednesday, February 29, 2012 - 12:30 The single currency fell versus the greenback after the European Central Bank the injected a huge amount of three-year cash into the banking system. The ECB allotted 530 billion euro in 3-year contracts at 1% interest. The first long term refinancing operation (LTRO) in December accounted only for 489 billion euro. However, the figure was close to what the market has been expecting, so EUR/USD got limited on the upside. One may see that euro’s correlation with risky assets has broken as higher-yielding currencies such as Australian and New Zealand’s dollars rallied against US dollar. The reason is that increased liquidity may boost carry trades in which investors use lower-yielding currencies buy riskier assets, so that EUR will get under pressure. On the one hand, money from the ECB will help the region’s banks to meet their financing needs and continue easing tension at the euro zone’s bond market. On the other hand, LRTO can’t resolve the euro zone debt crisis and the excess liquidity could weigh on the single currency in coming months. Support levels for EUR/USD lie at $1.3400 and $1.3388, while resistance levels are situated at $1.3485, $1.3500 and $1.3547. Chart. Daily EUR/USD ECB allotted 530 billion euro to euro zone Be successful with FBS

ECB allotted 530 billion euro to euro zone’s banks Wednesday, February 29, 2012 - 12:30 The single currency fell versus the greenback after the European Central Bank the injected a huge amount of three-year cash into the banking system. The ECB allotted 530 billion euro in 3-year contracts at 1% interest. The first long term refinancing operation (LTRO) in December accounted only for 489 billion euro. However, the figure was close to what the market has been expecting, so EUR/USD got limited on the upside. One may see that euro’s correlation with risky assets has broken as higher-yielding currencies such as Australian and New Zealand’s dollars rallied against US dollar. The reason is that increased liquidity may boost carry trades in which investors use lower-yielding currencies buy riskier assets, so that EUR will get under pressure. On the one hand, money from the ECB will help the region’s banks to meet their financing needs and continue easing tension at the euro zone’s bond market. On the other hand, LRTO can’t resolve the euro zone debt crisis and the excess liquidity could weigh on the single currency in coming months. Support levels for EUR/USD lie at $1.3400 and $1.3388, while resistance levels are situated at $1.3485, $1.3500 and $1.3547. Chart. Daily EUR/USD ECB allotted 530 billion euro to euro zone Be successful with FBS

BOTMUFJ: EUR/USD technical forecast Wednesday, February 29, 2012 - 10:45 Technical analysts at Bank of Tokyo-Mitsubishi UFJ claim that the single currency may rise to the 200-day MA at $1.3722. The specialists note that EUR/USD’s 5- and 21-day MAs are both pointing up – long-term bullish signal. At the same time, the bank says that if euro doesn’t manage to overcome $1.3509 (38.2% Fibonacci retracement from the pair’s decline from the May 4 maximum at $1.4940 to January 13 minimum at $1.2620), it may slide to the 90-day MA at $1.3243. As the recent advance of the single currency was very rapid, EUR/USD may survive short-term correction. Chart. Daily EUR/USD BOTMUFJ: EUR/USD technical forecast // FBS Markets Inc. Be successful with FBS

Citigroup: sell EUR/GBP Tuesday, February 28, 2012 - 12:45 According to the Confederation of British Industry, the gauge of retail sales growth improved from minus 22 in January to minus 2 in February (versus -17 forecast). British pound declined by 1% versus the single currency since February 21, the day before Bank of England minutes showed two policy makers voted for a larger increase in asset purchases than agreed at this month’s meeting. Analysts at Citigroup think that now there’s a good chance to buy pound n the dips. The specialists advise traders to open shorts on EUR/GBP at 0.8473 targeting 0.8250 and stopping at 0.8555. Chart. Daily EUR/GBP Citigroup: sell EUR/GBP // FBS Markets Inc. Be successful with FBS

Nomura: forecast for euro is still bearish Tuesday, February 28, 2012 - 11:15 Nomura has made the best 3-month forecasts for EUR/USD and USD/JPY, according FX Week. Such conclusion was made due to the comparison of the bank’s 3-month projections made in the middle of November and the actual rates at the middle of February. What does the bank expects next? Nomura is still bearish on the single currency. According to Nomura, the pair EUR/USD will fall to $1.20 by the middle of this year. The analysts think that the sovereign debt crisis will continue in spite of last week's bail-out package for Greece as other European economies may find themselves in need of bailouts as well. The specialists think that the European Central Bank's second longer-term refinancing operation LTRO on Wednesday will be lower than expected: the banks will get only 200-300 billion euro from the ECB. At the same time, according to the survey of Nomura’s clients most people are expecting ECB to grant the region’s 500 billion euro in credits. As a result, the bank thinks that euro will start sliding in case of the lower number. Chart. Daily EUR/USD Nomura: forecast for euro is still bearish // FBS Markets Inc. Be successful with FBS

Barclays: comments on USD/JPY Tuesday, February 28, 2012 - 09:15 Technical analysts at Barclays note that the pair USD/JPY tested the levels above the weekly Ichimoku Cloud and are now looking for confirmation of the bullish trend. The specialists claim that the greenback may add about 10% versus Japanese yen if it managed to close the month above 21-month MA at 80.90 yen. In this case American currency will climb to 88 yen. Chart. Daily USD/JPY Barclays: comments on USD/JPY // FBS Markets Inc. Be successful with FBS

Westpac: trading ahead of LTRO Tuesday, February 28, 2012 - 08:30 The European Central Bank will conduct its second LTRO operation on Wednesday, February 29. The first round of low-cost refinancing operation took place in December: European banks got 489 billion euro in 3-year credits. Analysts at Westpac claim that if the region’s banks borrow less than 480 billion euro, investors will worry that the markets are too illiquid and will buy the safe-haven greenback against Canadian dollar. At the same time, if banks borrow more than 480 billion euro, one should sell US dollar versus its Canadian counterpart. The specialists favor the second outcome and recommend traders to take risk. Westpac advices to go short on USD/CAD stopping at 1.0060 and targeting 0.9770. At the same time, the bank warns that one has to be careful as investors could soon change course if they reevaluate and decide that a large take-up implies weakness in the system. Chart. Daily USD/CAD Westpac: trading ahead of LTRO // FBS Markets Inc. Be successful with FBS

BBH: US dollar’s under pressure due to oil prices Tuesday, February 28, 2012 - 08:00 Analysts at Brown Brothers Harriman note that as oil prices are rising, US dollar will find itself under pressure. The specialists say that the current oil price’s advance is caused by several factors. Firstly, supply from Sudan, Syria and Yemen has sharply contracted due to political instability if not to mention Libya and Iran. Secondly, Japan’s increasing oil consumption replacing nuclear fuel. Moreover, the unusual cold in Europe may be fueling demand as well. According to BBH, high oil prices increase the risk that the Federal Reserve will launch another round of quantitative easing as the economy of the United States will suffer as oil import becomes more and more expensive. The Fed’s Chairman Ben Bernanke will be testifying before Congress on Wednesday and Thursday, so the bank recommends watching his comments for the hints of the central bank’s opinion on the issue. BBH: US dollar Be successful with FBS

Forecast Pte: USD/JPY is facing correction Tuesday, February 28, 2012 - 07:30 Yesterday the greenback spiked to 81.67 yen reaching the maximal level since May 31. Since the end of January it gained more than 5%. However, technical analysts at Forecast Pte claim that the pair USD/JPY may lose about 1.5%. The specialists base their conclusions on the momentum indicators. The greenback’s 14-day relative strength index was at 72 yesterday, above the 70 level some traders see as a sign an asset’s price is set to change course. “The candle formation looks to signal a possible reversal,” say the analysts noting that American currently seems to be extremely overbought. As a result, the specialists think that US dollar will go though correction in the short term. In their view, USD/JPY may drop to 78.85 yen (50% retracement of dollar’s advance from the February 1 minimum to yesterday’s maximums). Then the pair may climb to 85 yen in the next 1-3 months. Chart. Daily USD/JPY Forecast Pte: USD/JPY is facing correction // FBS Markets Inc. Be successful with FBS