Good day forex traders.
How are you doing lately? I am having a gastric problem and I hope it goes away soon 🙁
We had quite an interesting week for some of the currency pairs and I hope everyone had their forex seat belts on! The market will always be there for you but a hit on your account balance and that money is gone for good!
Looking at the AUD/USD daily chart above we note that the currency pair maintained above the 1.0430 support line. Having said so despite that, we are not making much progress north. This suggests that the AUD/USD is receiving significant bearish pressure. It is interesting to note the bullish candles towards the end of the week.
With reference to the EUR/USD daily chart above we note a rather different technical situation. The EUR/USD was relatively more volatile and it climbed extensively until midweek and crashed like a meteorite. As mentioned earlier, it is an interesting situation versus the AUD/USD. The AUD/USD was still bullish at the end of the week while the EUR/USD went south. Any continued bearish pressure may see the support of 1.28.
In recent times we note better economic data from the US and China. While this is good for sentiments, it is with no doubt that the over all economic situation remains fragile. The US Non-Farm Payroll came in much better than expected. The US unemployment rate dropped further and is now at 7.2%. Compared to the near 10% previously, this is encouraging.
Now why did the EUR/USD dropped towards the end of the week? While no one can know for certain why, one of main belief is that of negative sentiments arising out of the Euro Zone. Earlier in the week, the Bundesbank (Germany’s Central Bank) cut their forecast for German economic growth next year 2013. As Germany is the largest economy in the Euro Zone, many often look to it to spur the economic growth. Therefore such cut of growth forecast will definitely affect sentiments.
As mentioned always, diversification of currency pairs may be a good strategy. This week’s divergence of the AUD/USD and EUR/USD is a good example.