U.S. Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.

• ‪S & P downgraded U.S. economy on Friday‬‬
• ‪Investors concerned over forced liquidations of U.S. Treasury holdings and speculative fall-out‬‬
• ‪Fed Funds Rate & FOMC statement due Wednesday‬‬
• ‪Dollar rally from 9,322 ‬is unfolding in 5 waves suggesting a major low is in place‬

Euro. Our bias BEARISH, we’ll be looking to sell on rallies.

• ‪Spread between Italian and German bond yields grew last week to its widest in 15 years‬‬
• ‪Pressure is on for the EMU in the week ahead, as it is shaping up to be a make-or-break time across financial markets‬‬
• ‪How the U.S. Dollar reacts to the highly-anticipated U.S. FOMC rate decision and statement on Wednesday is likely to set the tone for the major currencies - particularly the Euro - in the remainder of 2011.‬‬
• ‪EURUSD’s rally from the 2010 low is in 3 waves‬‬
• ‪As long as price remains below the 26th July high of 1.4525, the bearish Euro outlook remains.‬‬

Japanese Yen. Our bias NEUTRAL, on the sidelines till a clearer picture develops.

• ‪Last week's anticipated intervention from Japan's Ministry of Finance has had little effect on Yen strength‬‬
• ‪Expected U.S. Dollar weakness raises the possibility of more central bank intervention in the week ahead‬‬
• ‪A wait and see approach for the Yen is the best option at present.‬‬
• ‪USDJPY needs to overcome 81.45 in order for the series of lower highs since April to be broken‬‬
• ‪Skepticism of central bank intervention efforts remains as long as USDJPY trades below 81.45‬‬

British Pound. Our bias BEARISH, we’ll be looking to sell on rallies.

• ‪Recent developments coming out of the U.K. dampening the outlook for future growth‬‬
• ‪Bank of England Inflation report due Wednesday‬‬
• ‪Credit Suisse Overnight Index Swaps for the BoE have dipped into negative territory‬‬
• ‪Cables’ rally from the 2010 low is in 3 waves and may be complete‬‬
• We remain bearish Sterling in the week ahead.

Canadian Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.

• Canadian Dollar was down against the U.S. Dollar last week following a mixed batch of economic data, an unwinding of riskier assets and the global sell-off in oil prices
• Uncharted waters for the Loonie, but risk aversion, declining oil prices and market uncertainty for the troubled Greenback bode ill for the Canadian currency in the week ahead.
• USDCAD has reached the 200 SMA
• Exceeding the June 0.9911 high would put a double bottom in place with the April and July lows and indicate a significant shift in the longer term down-trend.

Australian Dollar. Our bias BEARISH, we’ll be looking to sell on rallies.

• Aussie under increasing pressure last week with global sentiment taking a sharp turn to the downside
• ‪Employment report due on Thursday‬‬
• ‪AUDUSD ‬has continued to plummet and is now almost 700 pips from its record high last week‬
• ‪Next key support comes in at the 200 SMA by 1.0300 levels‬‬
• ‪Expectations are for a snapback rally to 1.0520 (the underside of the rising trend-line from May 2010) or possibly 1.0680 before further declines to parity‬‬

New Zealand Dollar. Our bias NEUTRAL, on the sidelines till a clearer picture develops.

• ‪Similar to its trans-Tasman neighbour, the Kiwi last week was also under pressure, falling some 500 points against the U.S. Dollar by Fridays close‬‬
• ‪The Kiwi’s’ outlook over the coming week is admittedly unclear‬‬
• ‪Kiwi price action will no doubt be determined by the broader global sentiment landscape, which doesn’t bode well for NZD‬‬
• ‪NZDUSD has reached 0.8300, a level that is expected to provide strong support‬‬
• NZDUSD strength would encounter resistance at 0.8460 and 0.8540 levels before further declines.