Source: ForexYard
The USD is up prior to the North American trading session despite a failure of the US super committee to come to an agreement. Pressure remains in the euro zone as Moody’s said France’s credit rating could be downgraded. With the recent USD strength some of the major currencies are now standing at significant technical levels.
It is expected today that the US super committee will fail in its mission to agree on budget cuts and potential tax increases. The failure does not come as a surprise to most market participants given the inability of Congress to work together on almost anything these days. However, it does add an additional level of uncertainty in the already shaky financial markets. Despite the negative news the USD is bid to begin this week’s FX trading as market players focus on events in Europe.
This morning Moody’s warned that France’s Aaa credit rating could be reduced due to elevated borrowing costs and a poor growth outlook for the French economy. One month ago Moody’s warned it could put France on a negative outlook within the next three months. This puts expectations of additional rating action on course for January.
Risk sentiment continues to turn lower due to the European debt crisis with the German DAX down by 2.60%. Many of the major currency pairs are standing close to significant support levels. The GBP/USD is testing the 1.5630 support from the October 18th low. A break here could spur further declines towards the October low of 1.5270. The AUD/USD has retraced 61% of its October move and could fall back to the October 4th low at 0.9385. The NZD/USD has broken its long term rising trend line from May 2010.
Read more forex trading news on our forex blog.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
