Good day forex traders and koalas.
The year is about to end and I hope you are having a fantastico time! May everyone harvest more pips in 2013!
In the previous EUR/USD forecast we noted bearish pressure on the currency pair. The continued Euro Zone uncertainty probably created a drag on the euro currency. The approaching US fiscal cliff deadline was also of concern,
Looking at the EUR/USD daily chart above we can see that the price action is slow due to the holiday season. The currency pair is holding above 1.32 for now. There is divergence versus the AUD/USD which dipped due to the Australian budget woes.
With the US fiscal cliff yet to be settled, we are seeing a high amount of risk. A positive development may see the EUR/USD going on a rally while a failure to avert the US fiscal cliff may see risk aversion due to fears of recession. Coupled with a low volume condition due to the holiday season, unexpected spikes may happen. Extreme caution is advised. Do remember that watching from the sidelines is an option.