September 20, 2011

Q4 Predictions For 2011

I have a guest post for you today from Sara Patterson. In this article she provides you with some predictions for Q4, which is now just a few weeks away, for some of the major currency pairs. I hope you find it useful.

The fourth quarter of 2011 is only a few weeks away, so now is the time to take a closer look at some of the major currency pairs and consider where they may be heading in the coming weeks.
Let’s start by looking at the ever-popular GBP/USD. There’s no question that the economy in England isn’t quite as troubled as that in mainland Europe, but the country’s banks are clearly embroiled in the region’s fiscal catastrophe, a point of contention which will weigh significantly on the country’s banking sector. There mere fact that the banking sector plays a huge role in England’s economy means that the country’s economy is unlikely to be stabilized in the coming quarter.
The 1.5850 area should be the one most closely watched in the coming quarter. If the parir can close below that level on a daily candle, a threat to the downside may be realized. Some of the possible targets below include the 1.55 and 1.50 levels. It should be noted that GBP/USD is sensitive to the global risk appetite in general, and that if the stock markets continue their downward spiral, the pair will also suffer, and this is something you should keep your eye on in the final quarter of 2011.
With rapid and volatile headlines coming out of the both the US and the UK, EUR/USD is a pair that should be watched closely. The European debt crisis will be a leading factor in determining the direction of the pair, and it’s hard to envision anything except the failure of this pair.
Nevertheless, any small spurt of positive news from either the US or UK can cause a snap in pricing that could shock the market, though I expect that the pair will eventually swing back towards a negative bias. It’s entirely possible that the 1.30 area may approach by the end of the year, but it will rely entirely on the advent of positive news coming from the region.
The Franc is in an unusual situation right now, since the Swiss National Bank has announced that it will not tolerate the EUR/CHF pair being below 1.20. In other words, the SNB will be willing to buy foreign currency in an effort to weaken its national currency. I have no doubt that the USD/CHF pair will change dramatically in the coming months. With the CHF formerly competing directly with the USD for safe haven status, this pair will most probably shift towards the Dollar should the intended weakening of the Franc come to fruition. Expect the USD/CHF to continue toward the parity mark during the 4th quarter, although it might be a bit of a grind at times.
About the Author:
Sara Patterson is a regular contributor to DailyForex, a website that offers Forex brokers reviews, technical analysis, news and free Forex signals aimed at helping traders make their Forex trading as profitable as possible.



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1 Comment on Q4 Predictions For 2011 »

September 28, 2011

Marco @ 6:20 pm:


I agree on the 1,30 EURUSD being a possible price before the end of 2011. Even if Germany and other countries do seem to understand that they need to do something about this crisis in Europe, it seems like there is no real hope in the short term.

Greece will not default again in 2011. Too many banks would take a major hit from this, and they do not have anything to cover this risk. Still, there are many problems in Europe. It's definitly not looking good.



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