EUR

Dears,

the main question is how large QE2 will be
will it be bounded like 500 billion for six months or will it be open ended like 50 billion every month until the FED is happy
strictly speaking around the FED mandate, inflation is low and price stability is maintained - there is no reason the FED should do QE2
However, since when did the FED stick with its policiy mandate?

FED is a private grouping of bankers mandated by the Congress to keep the US economy chugging at what ever cost. What Bernanke and Greenspan did in the 2002-2006 was simply inflating the economy and this is what Bernake is going to do now. Overtime, if the US can reduce its dependence on foreign oil, then a lower dollar is great for the US industrial military complex.

FED is indicating panic to the markets - thats what QE2 is. Panic will decrease the value of the dollar and allow US trade balance to improve. Now, if China does not listen, the US government must come up with trade sanctions against select Chinese companies - starting with Banks and Energy / Oil companies. US does have an option to decease its dependence on China and increase it on India - this is where the US money is going - check India's BSE. The alliance betwen India and US is less of a military alliance and developing more into a strategic business alliance via outsourcing.

As the Dollar index dips sharply and below 70, there will be a bigger pressure on China to allow the Yuan to apprecite.

The best card Europe (Germany) could play would be a forced default of Greece bringing the Euro down to a lower level.

The best bets long term are the Swisse and the Aussie - the first being net positive capital flow and the second being net positive commodity flow.

I think Euro could top 1.50 by mid November - and a subsequent contraction in Eurozone could develop by srping time.

The US can dig itself out by devaluing the Dollar Index below 70 - provided the Republicans Boehner and Co do not start attacking the FED.

if not sustained.. would that mean reversal.... my anser is "NO"..
my initial target 3800/3900 level met already... could drift lower..... but i wouldn't assume that for now...
how it trades this week will give us a big clue whether Euro will jump to the next level or see a rejection... only break below 3380 level would be the first caution for bigger retracement or possiby short term reversal... only break below 2586 confrims resumption of downtrend....

to the upside.... if Euro manages to climb higher this week and closes above 3900 level(weekly)...
it has a good chance of extending it to 4400/4500 level... so i just wouldn't assume it has topped and headed lower already....

like someone i know would say " assumption is the mother of all f*ckups!!".... keep that in mind.. very strong statement which is so true... :)

CATNIP... the only point i want to make is... don't assume things based on what you think is right... you maybe right but all the other traders maybe foolish enough to go the oher way unreasonably...

Well after this move up a retracement is necessary. ;) This might become a deeper one but I doubt we will cross 1.30 again.

EUR bulls out of breath as expected ... EUR red flags finally spotted by eur bulls
nevertheless i will close EURGBP short with 100 pip und EURUSD short with 60 pip and EURJPY short with 50 pip . Let the stubborn PBOC buddies waste their reserves on Greece bonds...
will they have enough to bail out Spain bonds? Nope.

catnip...

USDx is not eyeing 76 EURUSD is not crossing 137 and no QE is announced just as I predicted
without any chartastrology.
Fact is private debt in Eurozone is now as high as US and retail revenues crashing.
That is what is really going on in Euroland.
All else is chartastrology and wishful thinking.

another predicition of yours that Euro has topped...

Euro not only crossed 137 but pushed thru 138xx level as if to mock you... :)
Are we going to see parity by yearend?