Currency pairs remained broadly unmoved on the forex dance floor yesterday. Mr. British pound did try moving up against US dollar and Euro, however all movements zeroed out by the end of the day.
Uncertainty is the keyword. The US airstrike against the Islamic State (Isis) has caused widespread uncertainty. Prime Minister David Cameron appears to be paving the way for British air strikes as well, with parliament expected to be recalled on Friday.
While currencies were unmoved stock markets across the globe fell substantially yesterday. The Eurozone markets in large part due to the inactiveness of the ECB and the poor data coming out of the Eurozone. US and UK equities fell off a cliff as well because of heightened geopolitical tension, added to this the worries over China and its levels of productivity, it all is a little bit scary. Commodities came out smiling however with gold and oil both posting healthy gains.
As far as the US dollar is concerned, war could have an economic consequence. Costs of previous wars in Afghanistan, Iraq and Pakistan since 9/11 was estimated around $4.4 Trillion, and the US paid for the past wars by raising taxes and/or selling war bond.
What is going to happen this time, with Russian threat and Iranian nuclear issue added to the ISIS turmoil and Israeli conflicts with Hamas? Let’s not hope World War III…
In the other part of the world, we will hear from the Reserve Bank of Australia early Thursday morning during the Asian session which could push Mr. Aussie dollar low towards our previous bearish targets.
With a relatively light calendar ahead, the forex markets may take their cues from broad risk sentiment and geopolitical concerns.
Intraday Forex Technical Levels
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Short positions below 1.2836 with targets at 1.2810 and 1.2771 in extension.
If Pair Goes Nuts: Above 1.2810 look for further upside towards 1.2874 and 1.2917.
What’s up on the Forex Dance Floor: The pair is an overall downtrend below the Ichimoku’s cloud. The RSI is moving below the neutrality area. Also one of the largest international brokers says that 56% of traders are long the pair. Using this market sentiment index as a contrarian signal, the combination of the technicals and current sentiment gives a further bearish bias.
Supports and Resistances
1.2974
1.2917
1.2874
1.2836 Pivot Point
1.2810
1.2771
USD/JPY 4-hour: Consolidating.
Invest Diva Likes: Long positions above 108.71 with targets at 109.17 and 110 in extension.
If Pair Goes Nuts: Below 108.71 look for further downside towards 107.31 and 106.15.
What’s up on the Forex Dance Floor: The pair is on an overall uptrend above the Ichimoku’s cloud but is now consolidating around the level at 108.71. The RSI is heading above the neutrality area.
Supports and Resistances
110
109.17
108.71 Pivot point
107.31
106.15
AUD/USD 4-hour: Downside prevails.
Invest Diva Likes: Short positions below 0.8895 with targets set at 0.8839 and 0.8790 in extension.
If Pair Goes Nuts: Above 0.8895 look for further upside towards 0.8937 and 0.8981.
What’s up on the Forex Dance Floor: The pair is on a strong downtrend below the Ichimoku’s cloud, after rebounding temporarily from the bottom level at 0.8839 and teasing the level at 0.8891, the pair is now back on track with drops. The RSI is moving below the neutrality area.
Supports and Resistances
0.8981
0.8937
0.8895 Pivot Point
0.8839
0.8790
![](https://investdiva.com/wp-content/uploads/2024/07/195507433_277762383857508_5258379056395561164_n.jpg)
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