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10 December Forex daily review

Sergiy Zlyvko
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On Tuesday, closer to the close of trading in Europe, the euro/dollar crept close to 1.38, where profit started. A British pound came under pressure from the cross rates, and did not update the Asian maximum 1.6465.

Risk appetite gradually fades away, which negatively affects the growth of major currencies against the U.S. dollar. Local bearish trend for the dollar remains strong, but there are technical signals indicating the correction in the dollar index from 79.85 to 80.30. News flow on the environment remains sparse, so before the closing of the Asian session, the dollar is expected to decline, the growth is expected in the second half of the day.

Democrats and Republicans in Congress agreed on the budget. If the draft budget for 2014 is approved by the lower house and the Senate, in January the government will avoid the shutdown. The traders should be vigilant today when selling the dollar and follow the yen crosses. Further decline in the yen crosses trigger traders to cover short dollar positions.

The euro/dollar followed the main scenario to 1.3795 mark and rebounded from it. Currently the pair is trading at 1.3760. Traders should buying more carefully, because on DXY hourly chart AO indicator formed five bases without bullish divergence streak updating its minimum. This model indicates expansion wave and a harbinger of a deeper correction. I think that even in the total growth of the euro rate of 1.3800 level cannot stand.

1.3735 and 1.3705 levels can be used to buy the euro. The second level will be safer. We recommend to reduce the volume of purchases by 2-3 times or clearly follow the risk management. Update for today is not considered. We are waiting for the growth to return to 1.3780 and 1.3735. 1.3735 is playing the support.

The British pound on the American session was unable to update the Asian session maximum, crosses we under pressure. Nevertheless, daily maximum correction to 1.6465 extends to 50-point range. 1.6400 and 1.6365 levels can be used to buy a pound. Since yesterday the pound was defended by the EURGBP cross, we can upgrade from the current maximum and then go for a correction. AO is in the neutral zone, stochastic and the AC has already crept up to the buying area. We’re against purchases and wait for rollback to the 1.6400 mark. As the pair retreated to 1.6400 so there we will decide what to do with the British pound.

From minimum 0.9070 AUDUSD exchange rate has appreciated by 90 points. From 0.8990 – by 170 points. At 8.00 GMT the pair is trading at 0.9130 and quickly rolled back to 0.9120 mark. The traders can buy the Australian dollar using low amount, but given the attitude of RBA to the Australian dollar, AUD shorts are better against the dollar than buying.

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Iron FX 1.11156/1.11128 2.8
XM Markets 1.09948/1.09928 2
FxPro 1.10184/1.10171 1.3
FXCM 1.13943/1.13912 3.1