Euro is forming a new diapason
On Thursday EUR/USD pair reached a level higher than 1.30, breaking the resistance, but as it turned out only for a short time, Friday market influenced negatively the European currency. Probably short-term traders locked in the profits, due to that euro returned into the area lower than 1.30. It was a quite strong pass, we think that the market is ready to begin the movement into the upper part of a bigger consolidation.
But for that purpose the level of 1.30 has to begin functioning as a support, which is not happening at the moment, and the level of 1.32 in that case will become the resistance. It is hard to understand the reasons of growth of EUR/USD, because European Union has many problems, but current situations is pointing at the tendency towards growth. Euro has consolidated over the last two days, but the area where the trades are going on is a strong resistance, that is why the euro growth will not be easy.
Even after negative news from European Union, which is determining the descending trend, euro has grown, now the price of euro looks more balanced in the light of latest news. Currently the best friend of Euro is a Federal Reserve system, until it makes the dollar depreciated. One should note that based on the week review euro was trading almost without changes, which supports the existence of side movement.
AUD/USD is in the hands of bulls
AUD/USD pair based on week review descended by the amount it was allowed by markets, keeping the lowering pressure by the support in the area of 0.9650. It is visible on a daily graph that Australian dollar slowed down the speed of descending, due to well seen support. Nevertheless, we do not recommend buying AUD/USD pair because even with pair growth, passing the resistance at the level of 0.99 will be a hard task, and ultimately the market will throw a pair to the southern bound. We assume that in case of descending of Australian dollar lower than the level of support, which is the level of 0.95 the currency pair will move toward the level of 0.90.
Long-term problems of Australian dollar
We see long-term problems of Australian dollar which derive from strong dependence upon Chinese economy. Chinese economy suffers from slowdown of growth and of course there is a certain distrust to economic data which came from Beijing several days ago. That is why we see such problem as a credibility gap, it will not end in a crash but it will cause revaluation of Australian dollar values on the market. Over the week AUD/USD pair descended saving the descending trend.Social button for Joomla