Long's the way to go.
Oil gold support.
EUR/USD with so many tests of support on hourly charts, obvious bull.
Oil gold support.
EUR/USD with so many tests of support on hourly charts, obvious bull.
Eur/USD
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Not yet. My call for an extended bull trend was pre-mature.
The key for the trend of the EUR/USD and other currencies in 2006 will be interest rates. If the Fed levels off, the EUR/USD will go up sharply and sustainedly in a strong uptrend, since I'm pretty sure European Central Bank will tighten.
However, if the Fed continues to hike aggressively, EUR/USD will either be in a consolidating range or be in a downtrend, depending on which hikes more aggressive, Fed or ECB.
In the very short term, EUR/USD is good.
"If the Fed levels off, the EUR/USD will go up sharply and sustainedly in a strong uptrend,..."
That's what many presume, I think.
I disagree with that view.
While it may happen in the short term, the USD will have different reasons to come roaring back sooner than the majority expect: Wiping out euro-longs with it.
That is what may give faster traders the edge over the trend-trading hopefuls.
Plus, the euro-dominated nations are just too non-stable to have a sustained upward draft in EUR/USD.
I'd vote for nervous and panic-stricken range-bound trading for at least the next 3 to 6 months - 500-pts. Maybe 6-cents.
One thing I am certain of - the pair will be very busy.
And the money will go to those who can successfully traverse market reality.
x
What other reasons are there for a strong USD? More deficits?
I have this pair closing in a very weak position. Of course, this is strictly a technical statement for me as I am not a fundamental trader. Likewise (as always it seems) I will be looking to the JPY to give direction as the flows return in the new FY. I have the JPY closing in a very strong technical position last week. Most likely we will range trade until I pass on.
Good view points from everyone here. I appreciate it.
DRT
Good view points from everyone here. I appreciate it.
DRT
Expect the Fed to be more aggressive than the ECB.
The Fed is caught between a rock and a hard place. One one side is the housing market and all those ARMs coming due in the next two years, starting about now. Pushing rates too far, hell, keeping them as they are now will kill lots of people financially.
On the other hand, the M3 was mysteriously removed from publication, which leads me to wonder if this has anything to do with the fact that there's going to be lots of money printing. If that is the case, then of course inflation will zoom up and the Fed will have to hike to keep that under wraps.
Anyone remember what interest rates were in the early 1980s?
When a similar problem existed?- Status