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Good day forex trading koalas.

It is the end of the trading week and i hope everyone will finish green.

Yesterday we noted that the US Congressional Budget Office revised the budget deficit for the fiscal year 2011 from March’s $996 billion to the latest estimate of $1.066 trillion.

This caused problems with regards to the sentiments towards the US.

Looking at the EUR/USD chart above, we can see that the test of the 1.28 line succeeded in a breakout downwards for now.

The S&P 500 is down too from negative sentiments.

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While the US negativity was strong enough to cause a shift away from the US Dollar, today is probably a case of a classic risk aversion situation.

A reported stated that an European Central Bank council member mentioned that the ECB should not stop stimulus measures before the end of the year. This sudden realization of a poorer outlook for the Euro Zone probably caused many investors to be concerned. With the Euro Zone budget deficit crisis not far from their memories, investors rush in this knee jerk reaction to exit risky positions and seek defensive investments. Risk aversion is out on the hunt.

From a technical point of view, should the currency pair attempt to regain lost ground towards 1.28, it now has the line of 1.2720 to reckon with.

Trade Safely.

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Ok! Time for the weekends. Hope you managed to cash your pips for beer!!! So little time but so much to do… i’m off for now. See you soon!

Related Forex Articles from the Koala Forex Training College.

  • What is risk aversion in forex?
  • Read more Forex Articles and Views by The Koala at

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