The Euro zone crisis continues with the down grade of two nations Belgium and Portugal by Fitch and S&P which has further exacerbated the decline of the 17 nations union.The German 10 yr bond auction certainly did little to help the situation and the Euro might face further decline this coming week. The pair is now at a weekly support line with a minor trend line and might find some temporary relief from the four week declines.
Eur/Cad and Eur/Aud are both caught up in congestion areas and continue to make lower lows.Bearish momentum with the Euro may continue to be felt this coming week with the commodity currencies also feeling the effect of the global growth slow down.
On the Other hand the New Zealand dollar went lower affected by the events in Europe further completing a head and shoulders pattern we had formed a few weeks ago.It has broken a rising trend line and is headed lower if the global growth outlook continues to be negative.
The Gbp/Nzd and the Eur/Nzd which are highly correlated pairs have reached a resistance zone that could not be penetrated since last week.We have been watching the Gbp/Nzd with a lot of zeal since last week but has been unable to move higher forming a bearish shooting star on the weekly time frame. My outlook is still bearish for both pairs considering the many Euro zone problems that continue to weigh heavily on the Euro.The Eur/Nzd has formed a doji from the 8110 level resistance and is largely overbought.
Good luck trading out there and make sure you do your own analysis before engaging the markets.
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