2010 Forex Outlook
However Euro Under The Gun Against The Us Dollar
02/06/2010
head analyst: Forex Trading Unlocked
Theodore Kekstadt
The euro is taking it on the chin as U.S. rally Dollar continued this week. Is there more to come? Well, short-term reprieve is in the outlook for the beginning of the week. Expect a test of 1.3864 resistance. This is a key obstacle for the euro for any extended wave superior. Trade bears over here put into Hold this position for a routine higher than the objectives of 1.4111. If a demonstration this week just a correction, then this is where you run out of gas. With the S & P 500 in the gutter, a wild week in the currencies that are expected.
Many speculate that the current dollar rally is a flight to quality. However, I believe that the liquidation of the stock market is a flight to cash, and not necessarily quality. Big money is not to be in the market at current levels. Lets face. The numbers will be released next month is not helping. Downgrades to one side, the numbers are a trend in the worst sense.
For example. Last week the average hours worked by U.S. workers rose. Here's the twist that the story had. "This is a good sign." "This is positive for employment." "Things like this show that are stabilizing. "So, This was supported by many economic experts the same way.
Then there was the sense expressed by more than one dealer interviewed. The number is not positive. It does not reflect a positive increase in production. All that is reflected is the fact that companies are cutting more work out of employees they have. The fact that a worker registrations in more hours does not mean they are more productive. What means that companies are extending more work for less people. And what's the result? The business is not necessary to hire someone else, the business not have to pay additional money for health insurance benefits, and the employee is placed in a situation of increased stress to do more of their work.
But the media would have you believe otherwise. So how does this affect the Euro? Easy. Businesses are not going to hire more over the next year. Consumerism is dead because no one is immune to face a possible loss of employment. The retail sector is flat, the government is broken and the government can not create jobs. (Any work in the government also created a work that should not be supported by more than employment in the economy. So if you are a government created jobs below are for higher taxes, inflation and printing money. This is actually what happens.) This means that the dollar U.S. negative trend will resume once again.
Another reason for the European rally is that the U.S. credit rating remains gradient. If you think it's bad now. Wait until the end of the year. And China can not afford to dump all the debt they hold. So threats of war are not Trade Most likely what will happen. However, if we have the world to free market rules, but to allow China to use against us mercantilism, U.S. remain weak.
The euro area has its problems too, but not to the extent the U.S.. There are plenty of countries that are holding the euro area in limbo. However, output of production is still strong and is expected to remain so long a time. In the root of all problems this side of the Atlantic there is a beacon of light. There is no absolutely no way that the euro zone will be running at 100 percent of GDP. It will not happen. Germany is not allowed happen. EURO This gives the most long-term factor Bull. U.S. will run more than 100% of GDP at end-2010. Thanks for the change? Instead of giving U.S. $ 1.85 billion U.S. in the spending package. What about all Americans take a piece of that money. It amounts to over $ 6,000 per citizen. It is not his stimulus package. That the people have it. That would be CHANGE?
Mark my words … "The euro is at 2.0000 before it goes back to parity." U.S. is directed towards the path of Japan in the 1990s. And look where they are now. Oh yeah, right. They are still there!
So expect a rally earlier in the week. However, a failure 1.3583; and All bets are off for a slide that goes to mid 20 mangos. target extreme downward trend is 1.2467. This is not what we are looking for. Any proof of support to see at a low peak of around 1.3487 level. Sustained trade over here confirms a large building is being formed, and an upward bias is emerging.
About the Author
Education: Finance Degree (DePaul University)
Years on trading floor: 18
Years trading: 19
Years in trading business: 20
Years doing market analysis: 20 plus
After years of providing research, market analysis, and trading markets, I have developed a Forex content website. This is do to much encouragement from both peers and customers alike. The premise of the site is to present clear information, and weed out all the static.
It is my goal to present as much Free Forex Trading content as possible. This information is to be practice in subject, as well as applicable daily. Free market analysis and trade recommendations are available at http://www.forex-trading-unlocked.com
PM Forex Trading Outlook – DailyFX March 29, 2010