S&P downgrades US Debt to AA+

• S&P downgrades US Debt to AA+
• Week Ahead in Trading Monday at 9:30 AM – Register now
• Forex Trading Basics with Shawn Powell Monday at 4:00 PM Register now
• Mirror Trader Automated Forex Trading class- Rebroadcast
• Weekly Forex Wrap up show- Lunch time Friday 12:30pm Rebroadcast
• EURUSD moves toward resistance targets
• ECB Ready to Buy Italian, Spanish Bonds if Berlusconi Commits to Reforms
• Report ECB ready to buy Spanish and Italian bonds leads to surge higher in the EURUSD
• Aussie Breakdown

Posted: 05 Aug 2011 09:44 PM PDT After rumors that S&P would lower the debt rating, the rumor became fact at 8 PM ET.   The delay was due to some question about calculations by S&P by the US government. However, the rating agency went ahead with the downgrade well after the weeks close.  The change should cause the opening on Sunday to be quite volatile as the global markets adjust to something that has not been an issue for 70 years. One would expect that the dollar would come under pressure at least initially (the EU situation is not all that great and may be why there was action out of Italy today).  Bond yields should also rise although yields have not risen in reaction to the threat of a downgrade.  Will owners of debt diversify out of the US debt?  The reaction from China which is the US largest holder owner will be watched of course.  In addition, a domino effect may be felt for other debt instruments. The implications will take time for the market to digest.

Week Ahead in Trading Monday at 9:30 AM – Register now Posted: 05 Aug 2011 02:13 PM PDT Week Ahead in Trading this Monday at 9:30 AM with Greg Michalowski and Shawn Powell – Register now

Forex Trading Basics with Shawn Powell Monday at 4:00 PM Register now Posted: 05 Aug 2011 02:12 PM PDT Forex Trading Basics with Shawn Powell Monday at 4:00 PM Register now

Mirror Trader Automated Forex Trading class- Rebroadcast Posted: 05 Aug 2011 02:10 PM PDT Mirror Trader Automated Forex Trading class Wednesday at 1:00 PM EDT with Oz Golan and Shawn Powell. Learn how this tool can do the trading for you. Free to attend online. Watch the rebroadcast

Weekly Forex Wrap up show- Lunch time Friday 12:30pm Rebroadcast Posted: 05 Aug 2011 11:22 AM PDT Join us for the last Forex class of the week today at lunch time Friday 12:30pm. FXDD’s Forex Trainer Shawn Powell will host the class which will focus on the 4 major currencies and the key trading levelsWatch the Rebroadcast

EURUSD moves toward resistance targets Posted: 05 Aug 2011 10:30 AM PDT The EURUSD has moved higher with word out of Italy that they will speed of austerity, introduce balanced budget, etc. and this opens the door up for aid in the form of ECB bond buying support.   The price of the EURUSD has moved toward key topside resistance which starts at trendline resistance in the 1.4291 area. The 61.8% of the move down from the weeks high comes in at the 1.4300 level. Finally, the 200 hour MA comes in at 1.4305.  These levels should provide some profit taking resistance for the pair.  Watch 1.4253 below for support.

ECB Ready to Buy Italian, Spanish Bonds if Berlusconi Commits to Reforms Posted: 05 Aug 2011 09:18 AM PDT

Report ECB ready to buy Spanish and Italian bonds leads to surge higher in the EURUSD Posted: 05 Aug 2011 09:18 AM PDT  The talk is they will look to buy the bonds if Italy’s Berlusconi brings forth specific reforms The 5 year bond yields on the Spanish and Italian bonds have been moving higher. They don’t have the surge that Portugal and Greece experienced, however, they have been slowly but surely moving higher.

Aussie Breakdown Posted: 05 Aug 2011 08:31 AM PDT AUD/USD (daily chart) as of Friday (8/05/2011) has dropped precipitously this week and has reached down to dip tentatively below key support around the important 1.0400 support/resistance price region. This occurs after price action hit a new all-time high at 1.1078 in the prior week, and then broke down just yesterday below a confluence of the 100-period simple moving average and a long-term uptrend support line extending back to the June 2010 low. Currently at a critical support juncture, price action could very well extend its bearish streak into next week. If price is able to break and stay below the key 1.0400 price level, the next clear downside support target resides around the important 1.0200 prior resistance region. (Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.) James Chen, CTA, CMT Director of Technical Research and Education FXDD