Good day forex traders and readers.
Welcome to our weekly forecast reviews of the AUD/USD and EUR/USD. A big congrats to the readers who followed Elmar. I read that a number of you earned 100 pips and more. 🙂 There you go, as long as there is patience and proper money management, making money with forex is possible!
In the previous forex forecasts for the AUD/USD and EUR/USD, we noted both currency pairs slowing down due to bearish resistance. Critical levels of resistance were observed which if breached, might bring further bullish momentum. From a fundamental point of view, the US debt ceiling crisis loomed over the markets, reducing trading ranges across many currency pairs.
Looking at the AUD/USD daily chart above we note that the currency pair left the previous region behind and climbed further on the heels of bullish momentum.
We are now at another resistance level. Should the 0.9680 level fail, we may be looking at 0.9840 as an extended target. The immediate support probably lies at 0.9520.
Looking at the EUR/USD daily chart above we note that the currency pair also gained in value and breached the 1.36 resistance. We are now also at an immediate resistance region. I love it when our lines work! If you are a long time reader of TheGeekKnows you will release that our support and resistance lines are often target areas of forex moves.
Should the bullish momentum gain strength, we may be looking at an extended target of 1.38. If a bearish correction returns, we may be looking at a support region near 1.3510.
With the resolution of the US government shutdown and debt ceiling crisis, the markets are relieved. This is evident across the board as prices generally go into a rally. Risk appetite is present as investors seek higher yields.
These are happening generally at the expense of the US dollar as the world’s reserve currency weakens. There are many talks these days among experts of how the constant hostage situation of the global financial markets by the political squabbles of the US is testing the patience of many countries. China in particular is seen to be taking apparent steps to reduce it’s dependence on the US dollar for international trade. As over all demand drops, we may be seeing a long term US dollar bearish trend.
Speaking of China, it’s economy continues to display strength and this is definitely beneficial for Australia and the global economy as a whole.
Over at the European Union ,the pain suffered from the austerity cuts are probably paying off as the economic indicators show signs of stabilization.
Continue to monitor the economic releases for clues to possible sentiment shifts. Do be careful too as the delayed US Non-Farm Payroll will be released early this week.