The coming trading sessions could easily see a continuation of the previous weeks volatility. The primary news on traders minds is S&P’s cutting the long-term credit rating of the United States from AAA to AA-plus. Market speculators are well advised to keep an ear to the ground regarding risk trends as the S&P update came out late in the week after the market close.
EURUSD descending channel chart.
Who knows how the markets will deal with this this kind of scenario?
China – which holds massive quantities of the U.S. debt – had the official Xinhua news agency as vocal critics of the U.S. and asking whether the greenback should continue be the worlds reserve currency. This is dollar negative news and the market should react accordingly. Nothing is guaranteed though.
The Aussie Prime Minister urged the markets to be calm over the cut, saying that only one of the three ratings agencies had made the cut. Moody’s and Fitch have so far left the US AAA rating be.
PA heading into the coming week can potentially be utilised to trade the S&R zones after the market has picked the direction. On this note we we will look at EURUSD pair.
EURUSD is consolidating in the descending channel shown on the 4 hour candle chart. The currency pair is near to reaching the high of this trend channel and a break higher could foreseably have a build of momentum threatening 1.4500 figure.
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