EUR

The daily EURO already looks strong but buyer already have played out much of its strength as buyer are cautious of 127 128 area and its significance. It has rallied twice in 2007 and 2008 from those levels and rallied it did big and strong. Obviously for central banker and financial institutions that is the key area of interest. So Euro hitting 128 handle comes as no surprise. But this area is acting up as a significant resistance area only this time, if you want to see this pair just in recent history. OK 2010 price action for the pair has put a dent in Euro's rally that started early as 2001 and a what a rally it was. But I question is the bigger picture still intact, are we still in a up trend on Euro only to have been met with price correction levels. Considering Euro is only young we have known of its lows and lower historical support levels, but what we don't know is what heights it can really go to. If we remain intact in the price handle levels like 126 127 128 for another say 3 weeks we could be talking about an upside even in Q4 maybe like how I see is around 136, but only 13140 will confirm that.

Although the outlook considering the reforms and policy problem that struck the E-zone this year did struck a course for a downward suggestive trend. But the pair stopped well before the lows of 2004's price failure level of 11790, which would also have been major area of concern for Central Banks. Cause there after the only significant support level was 10610 and then to the pit. Its obvious that the CB's does not what the EURO in those levels as yet or was not comfortable with the rate of decline seen in past some months, hence it intervened. And still keep the big picture in our minds like the price action for this decade;

We need to reflect how the our counter trade party exchange is positioning its price mark. While most US trader or even institution may come out and say "I dont understand what EURO is doing up there, its real price is below parity" are themselves seen in this decade alone many a times dumping dollars and favouring another currency for short term benefits. Euro was the new kid on the block so sometimes it got favoured more sometimes the others. But this general trend amongst US financial institution has been going on for more than a decade now which really took off in the late 80's. They did that with regularly Asiatic currencies, European currencies or shape short term cash bonds in the past. So the problem is not in the sentiment its in the culture, which I'm sure will have to change sooner than later. But same time a global reserve currency that generally relies on one countries domestic economic health does not look good to stay intact for long either. And then the sentiment around reserve reform and its governance rhetoric still seem unchallengeable through global political agenda's or with Central Banks policy issues.

That said I dont really know what's solution for dollar or its status as a global reserve currency really means for the Americans themselves. I mean shouldn't they be concerned with this Dollar decline for the last 20 to 30 years is there no raise of concern globally for that. I mean yes Greece was not as big as US to continue raising their deficit level, but really How Big is BIG really? How big is 1 trillion 3 trillion, 4 trillion. How many trillion's worth is America for, or is it too Big and Good and Greater when seen in comparison with the rest of the world. I mean with can still exist and think Globally with certain exclusions can we not! I know my discussion is truely going the other way but really you have to think. If the deficits are the global problems then remove the global reserve rights, dissolve the IMF, world bank, who will the nation owe money to next NO ONE! Will prosperity be too hard to see from there I dont think so.

Hi ALL,

I notice some of which are holding weak positions.

I thought i chip in my penny' worth of thoughts.

Ashraf knows his stuff. He is here to guide us and NOT guarantee any profits. Most of the time he's right in his reading and Inter market analysis BUT no one, absolutely NO ONE can guarantee the future.

We need to use our senses, We need to read and listen to the market. One thing for sure that you can follow blindly. On a hourly chart or two maybe hour perhaps, you can follow BLINDLY. In other words, don't go AGAINST the trend. July 1st and July 12th hourly charts. However, there are exceptions.

There's another thing i learnt. Rule number 1. Have a strategy. Execute your stategy and STOP LOST position. When exeucted well, anyone or everyone will EVER have a problem.

GL ALL.

@Ozzy: Yes. *sigh*. Painful lesson. That's currency trading for you.

Anyway, this is quite interesting:
http://www.fxstreet.com/technical/analysis-reports/the-forex-technical-report/2010-07-15.html

If EUR/USD is going to 1.17 or 1.18, it must be taking the scenic route.

Seriously though, a lot can happen between now and late Q3/early Q4, which was AL's most recent estimate for such a level. Still lots of problems in the Eurozone I think. Lots of problems in the US as well of course, and elsewhere.

Hi Ashraf, Euro is acting strange and looks strong to me like it has changed its trend, Do uou still see Euro will go down to 1.18?