Currency News: Today’s Fundamental Analysis of Market Trends and Currencies (Nov. 2)

PEERING through markets via theoretical reasoning, we can establish our own assessment with regards the stability or feebleness of the health of the economy, based on a series of information disseminated almost daily online.

Nevertheless, a basic study alone is not enough to meet targets in appointing categorical price ranges to specific developments. In this regard, we need technical research to aid us in dissecting via visual proof how the present trading landscape affects major currencies that are under consideration.

The following should give us a glimpse on fundamental views on how current market trends affect consumers and the society in general.


USD/AUD Volatility

The US and the Australian dollar have slipped into a rather shaky range of prices. On its lofty side, the downtrend resistance boundary has taken the form of a neck-line in a “head-and-shoulder” pattern which is significantly a “triple-top” where the middle-top stands taller that the first and third.

Head-and-shoulders shapes are usually known to “cave-in” in the opposite route as the head, which stands at the highest part of the chart. Considering this reasoning, a resistance can be expected to occur, between the 1.06 to 1.07 range.

Acknowledging the USD/AUD from a basic standpoint, the Reserve Bank of Australia (RBA) has recently slashed its benchmark-interest rate to 4.5 percent from 4.75 percent while share markets around the globe continue to deteriorate, and foreign exchange capital in the market will go on seeking for safe havens in the low-yielding currencies, such as the US greenback.


Huge output among G8

This trend offers a healthy dose of optimism for forex traders who are bracing for lower-prices on the USD/AUD pair. Alternatively, if share markets veer on the upside, the Aussie dollar would create an apparent option for buyers as the currency still dangles the biggest output among the Group of 8 currencies.

Moreover, the Fed in the United States has reiterated their intent to let rates close to record-lows until middle of 2013 which may avert further any significant rally in the US dollar. Simply put, an anticipation of a consequent break in the two currencies can be a prelude to a long-term forecast for the Group of 8 economies.

As massive worries gripped markets during the past several years, capital went on searching for a safe area in lower-producing currencies like the Japanese yen, US dollar, and the CHF. The CHF’s rise in value was pushed by the steep increase in gold, which savored a huge moment of stability due to the sluggishness of the US dollar.

The CHF’s regained strength inevitably started to bother exporters in Switzerland, which then affected the country’s economy. The Swiss National Bank (SNB) entered the market in a very determined fashion and bought a bunch of other currencies and selling the CHF in hopes of averting the seemingly non-stop rise.


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