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Forex Flash: Dollar Index could soften further – Wells Fargo

FXstreet.com (Barcelona) - Nick Bennenbroek, Head of Currency Strategy at Wells Fargo feels that the U.S. dollar could soften further in the near-term given Fed easing and as improved market sentiment supports foreign currencies, before firming on volatility surrounding U.S. budget talks.

In the longer term however, he suspects that the Greenback should gain against the Euro, yen and Pound on economic out performance. However, he feels that USD will probably slip against commodity and emerging currencies, with those currencies helped by improving global markets.

Looking to technicals, he notes that there is currently a bearish outlook ahead, with the 20d MA remaining below the 50, the RSI of 48 is in neutral territory while other momentum indicators are consistent with declines. He sees downside support at the prior low at 79.01 (December), 78.93 (October), 78.60 (September) and 78.10 (February). He expects resistance from prior highs at 80.87 (January), 81.46 (November) and 81.82 (late August). Down-trend resistance since July is current at 80.65.

Forex Flash: Eurozone expected to exit from the crisis gradually throughout 2013 – Deutsche Bank

Elke Speidel-Walz, Chief Investment Strategist for Deutsche Bank, believes that the beginning 2013 will bring a deepening of recession in the Eurozone and that growth should not kick in again until the second quarter of 2012 “when improving external demand will be one factor stabilizing the Eurozone economy.”
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Forex Flash: USD/JPY upside momentum gone and waits for Japan fiscal and monetary policy - Commerzbank

As the USD/JPY upside mometum is gone, Commerzbank analysts say that investors will have to wait and see what fiscal and monetary policy measures will be implemented by the new Japanese government: “That will be decisive in determining whether it was correct to price in JPY negative factors”, wrote analyst Ulrich Leuchtmann, seeing no scope to the downside in the USD/JPY either.
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