DislikedHi FXholic,
This is my fundamental overview that colours my thinking about the long term USD market.
I definitely believe that the $USD is going to weaken over the next few months. As I have stated before, my long term target over the next 12 months is 1.4500.
........
After the trashing of the Asian economies by the US led World Bank and IMF some ten years ago, the situation has totally turned around. China and Asia have truly awesome financial muscle which they have never flexed. However, they haven't forgotten all the enormous economic devastation that the US banks did to all the Asian economies
As I said in my initial posts (see post 8), I believe that there has been a seismic shift in the "strength" of the US dollar as the worlds primary currency.
This seismic shift moved the USD from 1.2000 to 1.3800.
I now believe the next step in this seismic shift will move the US dollar from its current figure of 1.3400 to 1.4500 within 12 months
Our foolish politicians have irresponsibly squandered the enormous wealth of the US on stupid follies (Can anyone put their hand on their hearts and say that the people of Iraq are better off today than before we went in chasing "mythical" weapons of mass destruction? We have totally destroyed a country for no "justifiable" reason and sent their people back to the stone age living standards. Congratulations, George W....the rest of the world salute you.)
Also, due to the Asian meltdown, the Iraq situation, and also now the Credit meltdown caused by dishonest US bankers, the US is fast losing the trust and "good faith" of the world's political elite and the worlds major business players.
When the sh*t hits the fan, don't expect the rest of the world to want to bail us out.
The USD is going to get into trouble sooner and worse than people think.
But....I could be wwwrong !!!
.Ignored
I posted this on 8/22/2007 when the market was at 1.3450.
It has now reached 1.4097 (which is more than 66% towards the target) in less than one month.
I think that it may take far less time than 12 months to reach 1.4500.
The really sad thing is that our own President and his cronies/supporters have prostituted the USD and damaged our economic reputation far, far more than any enemy force could have done.
It is becoming very obvious that the world no longer sees the USD as THE major world currency. The usd will soon be just "another" currency, along with the Euro, Yen, CHF, GBP and Yuan.
It is sad, really sad to see a mighty force (USD) being humiliated in such a stupid way.
The seismic shift in the last 5 years is that the USD has been prostituted so badly that the "bedrock" of the USD has turned into quicksand.
The result is that, internationally, the USD has become unwanted and will soon become a pariah of international finance unless some "moral rectitude" is introduced into the system.
Mr Bernanke has now clearly demonstrated that he is overpowered by the muscle and threats of Washington and Wall St and that he is going to cater to all the whims of Wall St. This in turn has now seriously introduced the issue of the ongoing "moral hazard" into the financial system. That may be good, in the short term, for Wall St but the rest of the world is VERY disappointed.
And don't just take my word on this. This is evidenced by the international financial community selling an increasingly worthless dollar.
This has two possible endings:
1. The USD goes into a death spiral and China starts to dump its USD reserves and the Saudis break the peg to the USD, as is being reported in the rubbish press in Britain (BOTH of which are extremely unlikely in the near term)
OR
2. All the panic news stories come out in the press in the next couple of weeks until everyone realises that the world hasn't collapsed and there will be a correction. (However, confidence in the USD will be so significantly damaged that it will never regain its former position of strength. Therefore I still believe that the long term trend is for a weaker USD).
So....how do we trade this market?
We are here to trade and make money (as a friend of mine says).
I am still working all my trades on the basis that this will go to 1.4500 within the next twelve months.
So...wait for a retracement/dip...then go long...and go strong !!!
And the A-H strategy will keep you from getting financially damaged
I hope this helps some traders.
PS I could be TOTALLY wwwwrong !!!
.
