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What will happen if the USD defaults? and what will happen if it does not?

No one can deny the feeling of uneasiness with regards to the dollar, the markets are holding their breath. If the USA defaults on a loan payback the results could be catastrophic for the dollar and cause it to fly in a downwards direction against other currencies. However, if the USA does not default, it could cause a huge relief rally.

http://www.forexlive.com/blog/2013/10/03/us-treasury-dept-says-us-default-would-cause-credit-markets-to-freeze-and-dollar-to-plummet/

My plan until D-Day is to keep trading against the dollar. My method of trading incidentally means that if it does go against me I’ll only lose a small amount of PROFIT, as my trades are on 21 pip moving stops.

It looks like the USD cannot go much lower, USDCHF has space but GBPUSD is right at a top. But new tops can be set very easily in this type of environment.

To understand more about US debt the BBC have a useful webpage http://www.bbc.co.uk/news/business-24365018

Be careful out there.

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