Seems like it's trying to climb, but keeps getting hitting a ceiling made of brick wall ... 
- #3,243
- Dec 13, 2007 3:15pm Dec 13, 2007 3:15pm
- Joined Jul 2006 | Status: Trader | 4,090 Posts
I dream, therefore I become.
- #3,244
- Dec 13, 2007 3:18pm Dec 13, 2007 3:18pm
- Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Seems like it's trying to climb, but keeps getting hitting a ceiling made of brick wall ...
from a tech point of view, and i am mainly tech. add a 5 SMA close to all your charts, the monthly is long overdue a retracment, it looks like it's heading to the 1.43XX area so will come in contact with a 50% fib at 1.444ish area, normally a strong support for this pair.
just my view, and i'm still a bull.
- #3,249
- Dec 13, 2007 10:11pm Dec 13, 2007 10:11pm
- Joined Jun 2007 | Status: Know that you don't know. | 2,943 Posts
Hmmm...let me guess: Euro almost hit 1.50 a few weeks ago, dollar had been hammered across the board against pretty much every single freaking currency...
speaking by the dollar index, things don't look so good. It only broke a minor trendline, not the major one
In the meanwhile, the credit turmoil spilled over to UK...and the Pound got hit hard, which was overbought as well...
since when uk has euros? the subprime in uk was there from the first days. Uk was the most possible overbought currency...
Although the Fed has cut rates three times now, the US economy doesn't seem to be faring as bad as everyone expected...in particular, inflation is still something that worries the FED guys...and a weak dollar only adds upside risks to inflation...
PPI, on yoy,is 7.2%, when interest rate are at 4.25 heading lower. Does this seem normal to you? Don't argue "this is because oil prices", because factories and every business depends on oil, so it must be included
Looking at the European economy instead, it looks pretty stalled with mixed data as usual...there aren't enough economic releases for Europe that move the market, only God knows what the real economy is like over there...As a European myself, I honestly don't see all this prosperity and economic boom to justify such a strong Euro...
I'm european too, and I do feel the boom:
I didn't say europe is doing extremly well, but it does much better then US
Just wait another 6 months for the strong Euro to affect exports of major multinational companies and the EU will fall right into recession...
Then you should see the corporate profits from US. Did I told you that in 2007, corporate bankruptcy grew 40%. Things appear the same for 2008
Bottom line is:
1) US is in deep shit with the credit market
2) UK recently joined the party
Agree with 1 and 2
3) I see no reason why European banks should be exempt from this, so I am sure they'll soon join the party as well
maybe
4) Euro is too strong and can't stay at such high levels for much longer
5) FED cut three times, BOE once, ECB not yet...are they gonna be next?
Well, EcB are the only one showing inflation and speeking that will take need it measures. Trichet on his last speeach didn;t make any comments upon strong euro.
6) Strong Euro effects will show in the 1st, 2nd quarter earnings reports of big European multinationals
don't really thing so, but will see
7) 2008 is presidential election year, historically favorable to the greenback especially from the 2nd half of the year onward...Bush will be finally sent home and hopefully someone more democratic and less despotic will be elected to refresh America's image around the world
now, to me election year means big government spendings. Didn't US aproach a 1trillion debt, didn't they raise the budget deficit line twice in the last years??? How much good can a growing deficit current account do to a currency?
All in all, either the Euro takes advantage of the momentum to break above 1.50, or it will soon fade out and go back to where it should belong, which IMO is between 1.15-1.25
I don't have anything with a correction, I told about it some weeks ago, and I got burned on the wrong foot. But 1.15-1.25 is just too much
"Abandon all hope, you who enter here"
La Divina Commedia, Dante Alighieri
- #3,259
- Dec 14, 2007 9:59am Dec 14, 2007 9:59am
- | Joined Mar 2007 | Status: Fundamentally Technical | 4,446 Posts
Is this a correction or a trend reversal ??
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