Quote of the day: “Avoid having your ego so close to your position that when your position falls, your ego goes with it.” – Colin Powell
EURUSD – 1.4615 @07:00 GMT
Good morning. As commodities are reaching new record highs against the dollar, there’s only one way the EURUSD can go. Now that $1.45 has been breached, the pair aims towards 2009′s top side around 1.51. Meanwhile, the USD Index which is negatively correlated to EURUSD is already trading below 2009 lows, so we can look a bit lower at the bottom established in 2008. I for one expect to trade at those levels in the next few months. But speaking of today’s market conditions, there are few important events in the Forex Calendar before entering the Easter prolonged weekend starting tomorrow: one being the German Ifo at 09:00 GMT and the second one being the US Initial Jobless Claims at 13:30 GMT. Buying on pullbacks and breakouts remain the two best things to do for now, in my opinion.
Trading strategy: looking to buy on potential pullback to 1.4570, stop at 1.3510 (0.5% risk), target at 1.4690
Support: 1.4570/00, 1.4530/50, 1 4400 and 1.4300
Resistance: 1.4650, 1.4700/20 and 1.4800
Market sentiment: long term – mixed, medium term – bullish, short term – bullish, intraday – bullish
- EURUSD 4hrs chart 4-21-2011
- USD Index weekly chart 4-21-2011
have a good day!
Do you have any idea what's behind this strong movement? Monday's agressive trendline breakout followed by two days of hardcore bull movement, with no significant retracement.
I read somewhere that China is dumping dollars, what do you think?
Hi
I don't think it has much to to do with China. There are several reasons for current dollar's collapse, such as: commodities rallying to record levels, equities rallying (boosted by earnings), US debt rating downgrade, funds/investors dumping the dollar for higher-yielding currencies/assets etc.
Since everything is correlated – EURUSD follows, so it's not about stronger EUR (mainly) but weaker dollar. USD is in freefall mode and so far there's no reason for it to switch direction. Maybe G7 will consider market intervention to help the dollar ….
"Maybe G7 will consider market intervention to help the dollar …. "
That was meant for laughs — surely.
:D
history has a wicked way of repeating itself http://www.bloomberg.com/apps/news?pid=newsarchiv… – we can just change the date of publishing to someday in the next 3 months
Hi Liviu :-)
That was a good search on bloomberg… interesting it was that people still care US Dollar!
>>As commodities are reaching new record highs against the dollar, there’s only one way the EURUSD can go.>>
Contrary to the EURO bull momentum, the article below says EURO is nothing to gain, but its all the dollar weakness,
http://www.fxstreet.com/fundamental/analysis-repo…
but I wonder if people short Dollar and people short EURO who gains? is there any third side? makes me puzzled :-/ (I am although not a macro economics guy but a humble nimble micro lot player)
Both EUR and USD are in bad shape but EUR is in a less worse shape and interest rates differential is one of the reasons why EUR is performing better across the board at this moment.
Many analysts are focusing too much on Euro-zone's problems but simply ignore what happens in the US (they're biased), where the real problem is, thanks to the Fed who's running one big ponzi scheme to make people believe that the economy is doing alright.
Like you said, people short dollar and people short euro – just that there are less shorting dollar becausmany are long EURUSD as EURUSD is best reflecting dollar's weakness nowadays, being inversely correlated to USD Index.
Also, since everything is correlated, there's no need for people to be long EURUSD for EURUSD to go up – ex.: people buying commodities – > commodities rally -> commodity backed currencies rally (AUD, CAD etc) -> AUDUSD up -> EURUSD up following AUDUSD.
In fact, US Economy is day by day became more and more worse. They (FED) make people and world fool, that its economy recovering and unemployment is now going down. See, across the board the dollar is week since long. I don't want to say EUR is strong. but better than US dollar. commodities are excellent, its new high. see, the Gold….silver…actually people should invent more in Gold and silver. Now a days people loose the trust in Dollar. I am telling you very confidently the NYSE is going up because of FED flows money in the market to stabilize the economy. once FED will take back this flow of money, again the stock market will crashed. The big corporates of US shows the picture very different than reality because of Gov.(FED) pressure. Overall the situation of US economy is very poor. The people of like India (small poor people) enjoying the life with all sectors, as spending capacity and real economy growth, plus trumendious money flow. Why not US? because now there is no more super-power and no more dominant to other countries
Can FED take back the money? Will it be in its interest to do that? what will compel FED to take that all money back? I for some reason understand that since the first great depression, all they have done is pump in money but never take a single money paper back(I may be wrong here, if I am, I am sure Liviu will find a bloomberg link to post it up here :-)
Interestingly, FED, all it does is print the money and floats into the market, is not this somehow a different kind of ponzi scheme altogether? and then whose ultimate result is only destruction..
Sunny, as you note, I somehow have a feeling that answer to my own question of shorting dollar and shorting euro, who gains, is that there is a new economic power(or powers) already taking shape in Asia that could perhaps be the ultimate salvation for the downfall of debt ridden nations.