Weekly Report 5-15-22

Euro Looking Increasingly Vulnerable, Overall Sentiment to Stabilize after Wild Rides

markets last week, in particular in the across the broad rout in cryptocurrencies. Stocks the tumbled sharp but stage a late come back. Gold and silver resumed recent decline. Yen ended as the best performer, helped by both risk aversion and pull back in benchmark treasury yields. However, overall sentiments seemed to have stabilized with help from Fed's clear communications. Yen could turn into range trading, experiencing counter forces of stabilizing risk sentiment and pull back in yields. Also in the currency markets, Canadian and Dollar were the next strongest. Australian Dollar was the worst performing followed by Kiwi, and then Swiss and Euro. As risk sentiment stabilizes, the decline in Aussie and Kiwi could at least slow, with prospect of stronger recovery. Euro on the other hand, is starting to look increasingly vulnerable. It looks inevitable that Euro will break through 2017 low against Dollar soon. Also the path, there are downside risks in the common currencies in crosses too. EUR/USD Weekly Outlook EUR/USD's down trend resumed last week and hit as low as 1.0348. A temporary low is probably formed, just ahead of 1.0399 key support. Initial bias is turned neutral this week for some consolidations. But outlook will stay bearish as long as 1.0641 resistance holds. Decisive break of 1.0339 will carry larger bearish implication and target 161.8% projection of 1.1494 to 1.0805 from 1.1184 at 1.0069. Nevertheless, break of 1.0641 will indicate short term bottoming and turn bias back to the