Euro's Dead Cross

EURUSD is now hovering around 1.41. I am still long Euro. :-)

On a fundamental basis, US economy and Eurozone should also catch up in the next couple of quarters.
One major difference from summer 2008 is that US economy was suffering and Eurozone economy went south resulting in ECB rate cuts and Euro losses. In the current environment, the US economy is improving the and the Eurozone is catching up. this is similar to 2005 Euro losses and eventual Euro recovery.

By mid summer, US and Eurozone recovery should firm up resulting in Euro gains towards 1.5+.

The current sovereign debt issues related to Greece etc are transitionary. Consider this - ECB, Fed, BoE have pumped trillions in the market. and how much greek debt is due this year? 52 billion? thats it? Even a case like Iceland has been resolved, Greece should not be a big issue.
Greek debt is in Euros - not like South american debt crisis of the eighties or Russian default of the nineties. The debt is in local currency and the current maturity is not not so significant. However, bad mounthing the euro zone issues is actually beneficial to germany / france etc as it is leading to a weaker euro - so there is much talk about it.

So, short term, I give up - Euro is in a dead cross and all that, but on a fundamental and cyclical recovery basis, Euro will regain 1.50 within next few months.

happy trading,
j

Since Jan 1 - USD/JPY, GBP/USD, and EUR/USD. I was about to short Gold at 1122 this morning until it fell from there. I'm thinking of going for it, but maybe I'll wait for a bounce (though it will probably be minor) - AND I should probably wait until China GDP and other figures. Not sure about when to get back into the dollar either. Against EUR - I was thinking it may pop back to 1.4140-60, but that's not looking likely right now. Thanks Ashraf! BTW - I voted for you for the Shorty awards with a different Twitter account than my usual one in case you didn't recognize it.

Thank you Ashraf
Also I already voted you on shortyaward :)
keivan

Ashraf: Your twitters and much other work really appreciated - thank you.


Looking at the daily chart for cable, do you think that it will have to get down to the lows of Friday (1.6210 or so) today to confirm its downward turn? (or if not today, then soon)?

On my chart I have converged EMAs 200 & 150 acting as resistance-turned-to-support, which today would be around 1.6220, which it would have to break.

There would seem to be plenty of downside potential below there.