Forex Guides

EUR/USD Forecast 8 Nov 16

Good day forex traders.

The time is now. US goes to the polls to vote for the new president of the United States.

Looking at the magnitude of this event, the EUR/USD is seeing a limited range of values. Traders are likely holding back pending the result of the vote.

As per the EUR/USD hourly chart above, the currency pair is limited to the 1.10 + region for now. The bollinger bands are functioning as support and resistance. There is no clear indication of any momentum.

An interesting article came up on Bloomberg and it is as per what I always mentioned about the raising debt level of the United States. ” Barack Obama will go down in history as having sold more Treasuries and at lower interest rates than any U.S. president. He’s also leaving a debt burden that threatens to hamstring his successor.

Obama’s administration benefited from some unprecedented advantages that helped it grapple with the longest recession since the 1930s. The Federal Reserve kept rates at historically low levels, partly by becoming the single biggest holder of Treasuries. The U.S. could also rely on insatiable demand from international investors, led by China deploying its hoard of reserves. Global buyers added $3 trillion of Treasuries, doubling ownership to a record.

Now those tailwinds are turning around. The Fed is telegraphing more hikes at a time when interest costs on the nation’s bonds are already the highest in five years. The government’s marketable debt has more than doubled under Obama’s stewardship, to a record of almost $14 trillion. And the deficit is expanding again, after narrowing for four straight years, just as overseas holdings of Treasuries are shrinking at the fastest pace since 2013. ”

If significant fiscal changes are not implemented, we are looking at a possible scenario of an imploding debt crisis.

We are not in a position at the moment as we take a prudent approach to the current uncertainty.

Trade safely.

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