Monday, October 7, 2013

Right now, it is business as usual on the Forex front


Currency pairs seem to be quite indifferent to the shutdown of US government non-essential services. Like most, dealers seem to be taking the view that the problem will be resolved in time, and in the meantime are concentrating on business as usual.

Thus, the Euro / US dollar pair is responding far more to the fact that it has reached a technical resistance level in the 1.36 area. Gold (XAU/USD) is still exhibiting its long to medium term dominant downward trend (having bounced off support at 1281.00), as is to be expected given that US Quantitative Easing (QE) will be discontinued just as soon as the present difficulties have been resolved and the Aussie (AUD/USD) and Kiwi (NZD/USD) pairs are maintaining their rise on the back of indications that interest rates have further to rise (New Zealand) and were kept firm in the light of a possible further easing in Australia last week.

All this could change in the event that the next deadline for the US Congress (Oct 17th, which is 10 days away) passes and agreement is not reached so that the government is forced to default on its debt obligations.

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