EUR/USD Forecast 7 Dec 11

Good day forex traders.


Today, i would like to take a quick look at the EUR/USD in a shorter time frame. Remember the red lines that i used to show you on my EUR/USD charts? These are support and resistance lines that i identified by studying a few years worth of charts of the EUR/USD. Often, the currency pair reacts at those regions and it is good to use for a short term EUR/USD forecast.




Looking at the EUR/USD chart above, we note that it is currently making lower peaks. Having said so, the immediate support region would be the 1.3360 region followed by 1.3285. With meetings due at Brussels for the next two days, many investors and traders would be looking out for the efforts of the German and French leaders to solve the crisis. An area to lookout for in the event of a bullish breakout would be the 1.3550 region.


It is important to note that sentiments currently seemed mulled as the S&P 500 equity index is clocking losses for now.


Trade Safely.


Related Forex Articles from the Koala Forex Training College

• Support and resistance lines are never a single pip
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EUR/USD Forecast 7 Dec 11

Masoud : EUR/USD Weekly Review 6 Dec 11

Hello koala king and folks.


Good day to you.


The main events last week:


The US Federal Reserve which is the central bank of America, together with five other central banks, namely European Central Bank ECB, Bank of Canada, Bank of England, Bank of Japan and Swiss banks coordinated to inject liquidity into the financial system. This is to reduce stress in the world financial markets.

Recession in the euro area is expected as the indicators of the manufacturing sector in the seventeen-nation euro zone dropped and reached the lowest level in three years. Only German companies could increase their production levels.

Mario draghi, president of the ECB mentioned that Europe's banking system outlook was grim. However he promised that if politicians next week agreed on more stringent solutions, the banks would play a larger role in resolving the debt crisis of the Eurozone countries.

America's labor market grew more than expected in November. The America employment office in its monthly report released Friday said that during the past month, nearly 140 thousand new jobs in the private sector in America has been created. Some 20 thousand people lost their jobs in the public sector. America's unemployment rate fell in the last quarter. Finally the unemployment rate in November fell to 8.6 percent. Experts believe that the rate of decline in the unemployment rate is a good thing for the American economy and Barack Obama's administration will be evaluated accordingly as unemployment is a major concern of his elections.

Finance ministers from the euro area countries agreed on new measures to increase the capacity of the aid fund and more details of it will be revealed during the finance ministers' meeting in Brussels.

Germany and France have said the debt problem will require reforms in the euro area countries. It is necessary that the seventeen-nation European Union take immediate steps to restore confidence to the financial markets. Germany and France want the euro area member states to sign a treaty with binding commitments on measures to avoid a massive budget deficit.

From a technical perspective: The EUR/USD in H4 time frame is still in a downtrend channel. If the currency pair can break the upper channel line and close above 1.3520, it is the first sign of change of a temporary trend from bearish to bullish. The currency pair is likely this week to continue the downward trend and may come down to 1.3120


Have a nice time.


Masoud.


Masoud is a businessman and a Senior Forex Koala. Connect with him at our page on Facebook.


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• US Non-Farm Payroll Review 2 Dec 11 

Masoud : EUR/USD Weekly Review 6 Dec 11

AUD/USD Review 5 Dec 11

Good day forex traders.


Have you been trading the AUD/USD ? This is a popular currency pair as many traders seek to take advantage of the interest rate differential and earn from this carry trade.


In previous articles, we examined the fundamental aspects of the Australian economy and noted the growth potential of this commodity driven economy.




Looking at the AUD/USD hourly chart above, we observe that the currency pair is ranging rather tightly. This is probably due to the negative sentiments of the Euro Zone budget deficit crisis weighting down.


With China recently taking measures to ease reserve requirements of banks so as to stimulate it's economy, the general signal given is that the crisis is taking it's toil on the rest of the world. Many people are speculating that the Reserve Bank of Australia RBA may cut interest rates tomorrow in a similar move to ease tightening conditions and hence apprehension is high and reflected in the ranging AUD/USD.


Trade Safely.


Related Forex Articles from the Koala Forex Training College.

• How a low interest rate may affect a currency

AUD/USD Review 5 Dec 11

EUR/USD Weekly Review 4 Dec 11

Good day forex traders.

Now that the last month of the year is here, what thoughts are running through your mind? Are you glad that the year is coming to an end?

In the previous EUR/USD weekly review, we noted that the 1.34 region did not hold. With the SMA 20 over the SMA 50, all that remains is for the SMA 50 to turn fully bearish and the possibility of a sustained bearish momentum will be high. The SMA 200 which is an indicator of possible long term trend is now slightly bearish. From a fundamental point of view, the European budget deficit crisis is still in a complicated situation and with the recent credit rating cut of Belgium, sentiments remains depressed. In fact it was reported that Germany is apparently struggling with it's own bond auction. This suggests that events the Euro Zone's fiscally sound countries are starting to be implicated.

Technical Analysis

Looking at the EUR/USD chart above, the week was a bullish week. Closing around the 1.34 region, this historically important region of support and resistance is an area to be closely monitored.

SMA 20 = bearish

SMA 50 = flat

The SMA 50 did not turn bearish and the currency pair did not dip further too. With the SMAs not aligned in a direction, the possibility of a sustained momentum remains uncertain.

Fundamental Analysis

The market sentiments are warmer due to developments of the Euro Zone budget deficit crisis. It was reported that there is a proposal to channel funds from the central banks of Europe via the International Monetary Fund IMF to aid struggling Euro Zone countries. The loans can be as much as 200 billion euros. This proposal may facilitate funds without violating European rules that prevent the European Central Bank ECB from providing direct financial assistance. This is a a much welcomed change in development from the usual differences emerging from the 17 nations European Union.

Over in the US, falling treasuries resulted in higher yields as it was reported that the action by the Federal Reserve to provide emergency dollar funding for European Banks might had eased concerns in the market regarding a worsening Euro Zone budget deficit crisis. The drop in the latest US unemployment rate to 8.6% may increase positivity but one must take note that much of the jobs created are related to temporary assignments due to the festive season.

Trade Safely

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• US Non-Farm Payroll Review 2 Dec 11 
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EUR/USD Weekly Review 4 Dec 11

US Non-Farm Payroll Review 2 Dec 11

Good day forex traders.

Welcome to another review of the US Non-Farm Payroll. This economic event often brings about unexpected developments in the foreign currency exchange market and causes any EUR/USD forecast to be invalidated due to the extreme volitility.

In the previous US NFP, data suggests that despite the Euro Zone budget deficit crisis, the American employment market seems to be improving slowly. However the US Federal Reserve believes that an unemployment rate of below 8% won't be seen until at least 2013.

Looking at the EUR/USD 5 minutes chart above, we noted that the initial knee jerk reaction was to the upside. The US NFP came in at a gain of 120000 jobs. The unemployment rate fell to 8.6% and this brought about a surprise to the markets.

Despite the initial positivity, concerns regarding the Euro Zone budget deficit crisis continued to weight on the markets and risk aversion resumed. Furthermore many of the jobs gained were temporary assignments for the festive season and hence brought about uncertainty. After the initial reaction, the EUR/USD took a dived and touched below 1.34. That probably caught many traders by surprise.

Trade Safely.

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US Non-Farm Payroll Review 2 Dec 11