Perspectives of the EUR/USD in November | Inside Forex trading

The last month of autumn has come. Now it is time to share one?s forecasts of the main currency pairs dynamics in November. Today in the centre of my attention if the EUR/USD pair.

I will start from the technical comments. If build the Gann net on the chart of this currency pair and as a marking off point is the euro minimum in July, it is not difficult to see that during the first two months of autumn the unified currency remained in the frames of square, the lower border of which is marked by blue colour on my drawing. But borders of this square in the form of a rhomb are inevitably getting narrow, and the euro should choose in what direction to move further: up or dawn.

In the middle of October this currency pair tried to go up, but after it rose to the peak ? over the level 1.3100 ? it returned to the bounds of its ?own? chart. Thus, the euro is in uncertain situation in the beginning? of November, and it turned out to be at the cross-roads again.

Undoubtedly long-term euro trend remains bullish: the main line of support, which is marked by red color on my chart, remains lower to a great extent, so the unified currency is able to go dawn without the risk for its long-term bullish perspectives. But we are interested in the nearest perspectives, and they are very hazy. The question is will the support of September-October hold out for the 4^th time, which rescued the euro from further weakening in October.

The answer will depend on a series of fundamental factors.

• I think that the main risk of the euro in November will be connected with Greece. European government got into time-trouble, when they should urgently choose one of two variants,? when two variants are bad.

By the end of November Greece will be short of money. But the question is not simply in this, whether give the country the next portion (of 31.5 milliard euros) from the second aid package or not. It is worthwhile to give money if the aid program works in Greece. Otherwise the aid to Greece turned out to be throwing money in the bottomless barrel.

As I had already written, the committee of the EU-trio come to a conclusion that Athens will recover from debt only if they get two-years delay for their target fulfillment to lower the budget deficit. But according to the representative of Germany in the ECB Jorg Asmussen, ?additional time is additional money?. ?According to the estimates of Wall Street Journal experts, if Greece gets two years deferment, it will need the third aid package of 30 milliard euros.

So, the Eurozone should urgently choose one of the variants:

• whether approve the deferment to Greece with its all following consequences and pass to Athens the next 31.5 milliard euros,

• or to let Greece announce a default and leave the Eurozone.

But there is not such habit in the European Union to make decision quickly. Any decision there can lost in a series of summits, referendums and ratifications. More over toy shouldn?t be a prophet to foretell that most countries of the union will be enthusiastic about the idea of the financial aid to Greece. So, the euro dynamics will depend on the development of Greece history and the most important! ? on the market?s reaction on it.

• The second factor of uncertainty is Spain. Will disturbance around the country settle or become aggravated? Will the markets wait for Rahoi?s appeal for help or these expectations weaken? Which tactics choose Spain government?

• The third factor ? decision about ?financial break? in the USA. The elections will finish and regardless of who will win the elections, the congress should come to a decision concerning the budget 2013. If the negotiations are difficult, it will threaten the U.S. credit rating and will pressure the dollar. It will be a great chance for the euro to strengthen when the main opponent have problems.

At the moment the euro turned out to be in a difficult situation. The total influence of three factors will create the main vector of the EUR/USD movements in November.

Source: http://blog.forex4you.com/perspectives-of-the-eurusd-in-november/

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