Eur/usd

[Tiger21]

I see strong support developing for EUR / USD at $1.45 and $1.4515. Euro keeps bouncing after intra-day declines. I’m expecting a big jump in the EUR. Expecting $1.485 in the near-term.

 

[Nancy Cheah]

As I've mentioned earlier, this calendar week's low shall be 1.45 nett and it's high shall be at 1.47 nett.

Breaking above 1.47 nett and going to 1.5 nett is a dream for this calendar year.

Regards.

 

[Tiger21]

In monitoring the dollar – it is hitting near-term lows against multiple currencies, Euro, Australian dollar, Brazilian real, etc. Clearly investors are thinking that economic conditions are improving and are more willing to take on risk. Yesterday, confirming this thought, Bernanke said the recession is likely over, causing the dollar to slide. Also, retail sales exceeded expectations, another sign of economic strength in the US. There is no reason to get out of this trade. Still long EUR / USD.

 

[Tiger21]

Investors are finding additional reasons to move out of dollars and increase risk. First Bernanke said the US has moved out of recession and now Buffett. The market was priced in for a 0.6% gain in industrial production, while the report came in at a rise of 0.8%. Former Fed chief, Greenspan said if there was a significant issuance of Treasury securities (which it looks like there will be) that increased the national debt, then there would be of necessity downward pressure on the dollar. I’m still long euros against the dollar. It reached $1.4714 earlier today, the weakest level since December 18 – but couldn’t surpass that level. I think it will in the coming days.

 

[Nancy Cheah]

And also not forgetting that both oil and gold prices are soaring as well.

Perhaps when the oil price touches USD 100 per barrel and the gold price touches USD 1.2k per troy ounce, then we'll witness the EUR/USD touching 1.5 nett all over again.

Regards

 

[Tiger21]

Europe’s trade surplus widened to the most in more than a year, providing further evidence that the economy is improving. The euro is my favorite currency right now. I believe that the euro zone will begin increasing interest rates far before the US does and it looks as if traders believe so as well, increasing bets that the ECB will raise the benchmark yield from 1% by the middle of next year: the implied yield on the 3 month Euribor futures contract for June 2010 delivery is now 1.255% from 1.225% yesterday – implying at 25 bps increase. Saw this quote as well, backing up my thoughts: “Given the fragility of the US economy, the Fed can’t normalize credit and monetary easing policies. The bulk of highly liquid dollar assets will continue to flow into other currencies or commodities, putting downward pressure on the dollar,” stated by Mitsuru Saito, chief economist in Tokyo at Tokai Tokyo Securities.

 

[Tiger21]

Unexpected jobless claims drop in US to 545k from 557k a week earlier. Most importantly was the Street was expecting the number to come in this week at 557k. It’s tough not to continue to be long the Euro. At $1.4735 per euro, it’s the dollar’s weakest level since Sept 25, 2008. The good economic data continues to confirm this trend. I think the easiest thing to do right now is to continue to sell the dollar, however one technical indicator is starting to point against continued strength – the 14-day relative strength climbed to 74, the highest level since March 19. A reading of 70 tends to indicate a rally is approaching an extreme and a reversal may be imminent.

 

[Nancy Cheah]

The lowest for this calendar week I'm seeing is 1.46 nett and the highest shall be at 1.485 nett.

Regards.

 

[Tiger21]

The DXY is a few pips away from breaking below the Sept 22, 2008 low of 75.89 – from there, there is very little support until 70. That was the level of support in early 2008 and is the low since the early 1970’s. Euro hit $1.4821 today, dollar’s lowest point in a year. There hasn’t been strong talk on the part of non-US central bankers and thoughts are that it isn’t causing such a concern. Also, increasing likely the Fed won’t raise rates. Everything points in the direction of – short the dollar.

 

[Tiger21]

Fed policy statement due today, which should move currency markets. Investors continue to see positive news: Asian Development Bank raised its 2009 projection for Asian economic growth ex-Japan to 3.9% from 3.4%. Euro is at a new 12-month high. Swiss Franc is at a new 12-month high. New Zealand’s currency also. I expect the Fed to continue to give lip service to the fact that they will not be raising interest rates in the near future. Could be a volatile time if the Fed changes its stance, but I’m still short dollars.