Good day forex traders.
Hope you are having a great weekend. Well if you ended your trading week with a bagful of pips, it would be even better! I am feeling all groggy but hey nothing is going to stop my passion for the website 🙂
In the previous AUD/USD forecast we noted that the technical situation seemed uncertain. The currency pair could go either ways and hence observation was recommended. An upcoming European economic summit was due and many were looking at this summit to be pivotal. Fears of a sell off was strong if nothing concrete is planned.
Looking at the AUD/USD chart above we noted a rocket launch on the last day of the trading week.
SMA 20 = Bullish
SMA 50 = Turning Flat
The SMA 20 has crossed over the SMA 50 towards the upside. This indicates bullish possibility. One thing to note will be that the SMA 200 which indicates long term possibilities is lying right above. It is usually an immediate support and resistance and hence any bullish target to reach 1.0330 must clear this first.
I mentioned many times that the Euro Zone budget deficit crisis has pretty much hold the global economies hostage and indeed so it is. Often, a take on fundamental possibilities can be narrowed down to what the powers of the Euro Zone nations decide to dish down upon the markets with their policies.
A deal was reached at the European economic summit. Funds will be available to lend directly to troubled banks. Furthermore bonds of countries like Italy and Spain whose borrowing costs have soared will be eligible to be bought by the funds too and this enables assistance without declaration of a formal bailout.
Equities and high yielding currencies such as the Australian dollar soared as a result of risk taking. I mentioned that this summit may be pivotal and HA guess i was right on the money :p
On a side note, be careful of this coming Friday’s US Non-Farm Payroll. Recent US news have not been rosy and hence any disappointment may spiral negative sentiments.
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