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"The fact that this is a stop-gap solution has had a big impact on what people think the Fed is going to do. Therefore tapering expectations have been pushed back to March 2014 (from December 2013), so the bid for government bondsmakes sense."
- Rabobank (based on Reuters)
Pair's Outlook
Pair is depreciating further and is approaching 1.0275, the level which kept the pair support for 3 weeks in not so distant past. If the pair dips below it, it would put September low on the map with interim target being at weekly S2. We don not expect any of these levels to ignite recovery of the pair for now, but they are very likely to stall the pair. Only a peak above the 200-day and then 20-day SMA would uplift most of this pressure.
Traders' Sentiment
Bulls have eased up their grip on the market, but we don't expect to see any major changes in the long run. Bullish side of outstanding decreased by 2% and is at 73 gauge; bullish side of pending orders decreased by 4% and is at 69%.
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