By Forex Signs, Inc.
The U.S. dollar may expect a bullish sentiment in the trade today against its European contender as the Federal Reserve remains confident on pace and scale of quantitative easing 2. The QE2 scheme was announced in early November. Despite various doubts on the efficiency of the scheme, the Fed remains firm on their stand that QE2 will work. Further, the balance of economic data has gone beyond expectations since then, with most indicators pointing to an acceleration in the recuperation. This recommends to critics of the Fed plan that it may not have been necessary in the first place. However, at their December 14 meeting, most Fed officials appeared strong-minded to maintain QE2 as it situates, unless there is a much more dramatic pick-up in the US economy. During the meeting, Fed also discussed about the recovery’s pace; it is likely to remain modest, with unemployment and inflation deviating from the committee’s objectives for some time.
The unity displayed by the Fed may likely reflect optimism in the trade of the U.S. dollar. Traders will most probably take this opportunity to buy USD as FOMC Meeting Minutes benefit the currency.
Criscross Patern for AUDUSD
A further decline is expected to incur in the AUDUSD trade as the pair is currently engineering a downward trend in H1 time frame. The pair opened at price level 1.0054 with a bullish candle stick. At the time of writing, AUDUSD already broke initial support key level of 1.0007. With this, a strong bearish force is likely to transpire in the trade. Small bullish corrections eventuate every after a steep bearish candle, it is suggested to watch closely the chart while trading. A similar scenario occurred yesterday. The pair began with a bullish candle; price level is at 1.0157. Slight bullish corrections were seen almost every after 2 bearish candles. At the end of the day, the pair still lost roughly 100 pips. Again, declines may still place as technical indicators were implying so. CCI (14) at the moment is observed loitering at below -100 level. This implies that the AUDUSD pair is oversold. CCI (14) in H1 time frame dropped to as low as -175.113 then it created zigzag movements going up yet it has not reach beyond oversold parity of -100. At the same time, %R (14) is doing the same. Crisscross motions were distinguished which means bullish corrections were made yet these corrections were not strong enough to break the downward trend. With the pair having frequent corrections, it is best to set volatility at 90 pips only. However, there is also a slight chance that the AUDUSD pair might take a u-turn. If the Alligator’s lips become too close to the teeth, this might indicate that the trend may neutralize, thus a possibility of a reversal. So far, the teeth and lips are significantly distant from each other.
About the Author
Forex Signs, Inc., Founded in 2006 in Wall Street, New York City, FSI relentlessly strives to be the premier Forex brokerage company in the industry by providing exclusive and unmatched trading and investment related services while constantly developing innovative solutions that cater to the vast requirements of both individual and institutional market participants.
