Good day forex traders and readers.
Welcome to another weekly review of the popular currency pairs the AUD/USD and EUR/USD ! I was not able to provide separate forex forecasts due to my schedule. A very busy weekend for me but my heart remains here and boy must I do something now!
In the previous AUD/USD and EUR/USD forecasts, we noted that the immediate regions were strong support and resistance regions technically. We might experience resistance on any bullish momentum. Fundamentally the markets remained on the edge akin to students awaiting for the final year examination results! The US government shutdown and upcoming debt ceiling deadline remained drivers of apprehension.
Looking at the AUD/USD daily chart above we note that the currency pair remains weighted down by bearish pressure as the currency pair approached a previous high. The bullish momentum was slowing down as the week ended. Should it clear the high point, we may expect further bullish advances.
I like how the bollinger bands are working for our technical analysis and the immediate support may be the middle bollinger band.
Looking at the EUR/USD daily chart above we note that the currency pair remains capped by the 1.36 resistance as mentioned on the previous EUR/USD forecast. This line continues to remain a strong point of reference for any continued bullish pressure.
Once again our bollinger bands are serving us adequately. Look out for the middle bollinger band to be functioning as possible support.
I know some of you folks are probably tired of hearing this but alas the markets remain highly apprehensive due to the few fundamental issues affecting the US. While it is obvious to a certain extent for the short term trend, it has always been my duty to bring you the wider perspective of the fundamental analysis.
The US shutdown remains in effect and the economic drag that it creates will no doubt affect the various aspects of the US economy such as demand and employment. The longer it is, the worst the effects.
The upcoming D-Day of debt ceiling crisis October 17 is drawing closer and the markets are getting restless in apprehension. There is no telling of the consequences of an US government default. The realization of the unreliability of an otherwise safe haven will change the global financial dynamics.
Largely forgotten by media focus, the question of the tapering of quantitative easing by the US Federal Reserve remains. When and how will it be? The US economy remains addicted to stimulus, a view held by many economists and the reduction of it may shaken things up.
Trade safely and ensure proper money management.