Long-Term Outlook of Aussie & Euro...

Fundamental Analysis
Major currency pairs remain sensitive to risk sentiment. Disappointment is the key word after last week’s US jobs report and lack luster stimulus from the ECB and the BOE. Now, market is hoping that the Fed will deliver some relief. Though there is no QE3 as yet, traders will be keen to know what could be unveiled in the coming months.
QE3 continues to remain in the background. It is unlikely that lowering the rates further will encourage more borrowing in current economic environment. I think The Fed is aware of the limitations of more QE, but they are equally sensitive to the fact that a strong signal against stimulus may trigger panic across financial markets. That means the door to further easing is likely to be kept open.

Now, what is most probable? The Fed's language of further accommodation is likely to boost Risk Appetite, sending the US Dollar south, towards gravity.

The European Drama and banking instability is set to return to the spotlight yet again as the Euro zone finance ministers meet this week. I expect and so do many, as always little is likely to be achieved. News release of the efforts discussed could produce a near-term bounce in risk sentiment. Accompany that with Profit-taking on Risk-Off positions, we could see a relief rally later in the week.


Technical Analysis
Both the Aussie & Euro counts are pretty similar… though at different stage of development... (just my view, feel free to comment)

Aud/Usd Daily Chart

A Triangle Trend Shift at work?
Triangles that signify a major shift in trend should comprise 5 abc waves that would make up an ABCDE Triangle.

With that in mind, after much research, analysis and small test positions over the past weeks and months, this is my preferred Long-Term AUD/USD plan

Levels of interest, 0.99 / 0.9860 and 1.0680 / 1.07


Eur/Usd Weekly Chart

Price has reached oversold levels at important Long-term support zone, namely the 2005 Trend line support. A good bounce from the said support zone would present short opportunities over the coming trading sessions.

From a Long-term perspective, Monthly Chart shows some clearly defined resistance levels. Pulling the trigger close to resistance zone is my preferred strategy for this pair.

Levels of interest, 1.20/1.21, 1.3080, 1.33, 1.36 and 1.40


Next... I will take a look at my favorite Risk Barometer the S&P500