I am from an engineering field (EE, specifically signal processing), and I have been working on a paper since March 2014.
Back then, I spent a significant amount of time reviewing the literature and didn't find any existing work that discussed my topic. I actually finished the bulk of the paper several months ago (Jan 2015), but since then I have been editing and reviewing it with my coauthors before we planned to submit to journals.
I recently, however, found a similar paper that was "published" or posted on arXiv in April 2015. I believe that it is extremely similar (~80% of the ideas). I am not sure how much of an issue this is, as I have heard that arXiv is not a "legitimate" domain (in my field, almost everyone just uses the IEEE searching engine).
My original plan was to submit my work to journals soon. Do you think I can still submit my paper to a journal? How should I acknowledge of otherwise handle the existence of this similar arXiv publication?