EUR

this lucky i just want ask jamshed can he go long from these levels

Euro can hit above 1.35 by next weekend. End of the year, Euro will be above 150

There is an approaching run on the dollar in the next year or so.

The main catalyst for Dollar is slowing US growth.
Q4 09 was 5.6, Q1 10 was 2.7 and Q2 10 is approaching - in my estmate this may come around 2% or lower and by Q4 the US GDP could slow down to sub 1% with the effects of the stimulus fully consumed. That is the story for the 2nd half.

China is flying two kites. One is the US bonds and the other is Europeon bonds. The string that China uses to fly these kites is its huge forein reserves. When China did not buy the greek bonds, the Euro fell. When China came in to buy the Spanish bonds, the Euro picked up. Similarly, the main factor in Dollar's strenth has been the Chinease apetite for US treasuries.

China has no interest in allowing its currency to appreciate. It is using its low currency to develop itself by taking jobs from other parts of the world. A strong appreciation in the Yuan would result in a slow down in china and result in political instability.

So, China needs to keep buying the Dollar to prevent it from collapsing and at the same time keep the Euro up. A Euro dollar rate of 1.5 is ideal for the Chinese. Euro below 1.20 is a big problem and the dollar collapsing is also a big problem. In between these two events, the Chinese will keep switcihng.

Once Euro stabilizes above 1.3 - 140, the next problem for China is a large slow down in US and a free fall for the Dollar. China will deal with this by keep buying the treasuries and at some point will repeg to the Dollar.

The assumption that Dollar will remain the currency of choice in a risk averse environment will change when the markets drop and the dollar will drop.
Commodites and BRIC currencies may be the best winner in the long term along with metals and commodities.

Dollar bulls (calling for the start of a multi year bull market in the dollar index) are in for a big shock.

Lucky
I smell something ... recent EURUSD rally has nothing to do with analysts' fairy tales of turning
sentiment of merrily tug-of-war playing bulls and bears...
the best to do is to quit trading eur and usd for a while. EURUSD is now a matter of scalping or swing trading with narrow sl i think eurusd could well go above 131 as well as plunge to 127 and even parity is not out of sight as stress test looms ( perhaps banks taking in liquidity was a cause of eur spiking) and possible default of eur denominated loans to hungary etc. is not off the table ... worrysome is UST 10 y yield cannot defend even 3% ... i think after 127 eurusd may head to 131 ..but there are safer trades

A "short squeeze" should not yield 300 pips for a liquid world reserve currency....if so it is not liquid enough. Also amazing the Russian central bank buys AUD and CAD with USD and EUR and AUD and CAD tumble vs USD...
imo moves of this magnitude seen EURUSD within a day is not resulting from closing speculative positions rather it must be CB operations.

@ stationdealer, thanks for your interesting and entertaining thoughts, looking forward to hearing more specifics regarding some of your short term targets if you find the time!