EURUSD - Trends, Forecasts and Implications (Part 1) - page 90
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Break through 1.4788... Aim for 1.4892...
No further corrections seem to be in sight... We follow the market... )))
Fresh comment from VTB
So, the general optimism in the markets is flourishing so far. Yesterday the Dow Jones index closed up 0.52% at 9829, remains at the highs of the year. Gold prices are at $1014 an ounce. The euro is also high, with a high for the year at 1.4841 during the night. Only the Shanghai index closed yesterday with another drop, down 1.89% to 2842. And oil prices are showing a lacklustre performance, currently at $71.14 per barrel of WTI. The global economic recovery seems to be taking its course, with the first estimates of Eurozone purchasing managers' indices showing growth today and data on new Eurozone industrial orders in July rising by 2.6% m/m, from -25.1% y/y to -24.3% y/y (the low was in April, -35.1% y/y).
Recall that according to July data, US factory orders in July were at -23.2% y/y, while the low was only in July, at -23.6% y/y. In other words, the situation here is more or less the same as we have seen when comparing the dynamics of industrial production in the USA and the Eurozone. The decline in the Eurozone was noticeably stronger due to the demand shock (largely due to the decline in US consumption), but by now the situation in Eurozone industry has improved considerably and continues to improve, the size of the decline being almost equal to that of the US at the moment. Whereas in the US, factory orders have fallen and are simply stagnating. That is why the US needs a cheaper dollar to support its industry, otherwise the fruits of the recovery will not reach America.
In other respects, however, the situation in the Eurozone has been and remains much better than in the US. US retail sales in YoY terms were the lowest in December 2008 at -10.6% YoY, which has now increased to -5.3% YoY. In the Eurozone, retail sales were at their worst in February at -4.6% y/y, and have now risen to -1.6% y/y. And there's not much to say about the unemployment rate. The lowest unemployment rate in the USA in recent years was 4.4% in March 2007. By now it has risen to 9.7%. The minimum unemployment rate in the Eurozone was 7.2% in March 2008 and has only risen to 9.5% by now.
These calculations clearly show whose economy is stronger. Recall that the Eurozone has a positive trade balance and a relatively small budget deficit compared to that of the USA. In this light, it is amusing to recall the speculation late last year, when the euro-dollar was at levels around 1.24, that the Eurozone was about to collapse and the euro would fall below parity with the dollar. We have always maintained that the Eurozone will emerge from this crisis faster than the USA. The current appreciation of the Euro simply confirms the conclusions of the most superficial fundamental analysis.
I'm not wrong - it's over.
>> Wrong.
>> Wrong.
I have a target of 1.5 tomorrow...
Surprised?
Not anymore. :)
Only helps.
Break through 1.4788... Aim for 1.4892...
No further corrections seem to be in sight... We follow the market... )))
Hi Kharko :) BTW you did not do my system the way the guys did here :) remember Pyramid Kharko? Pyramid_kharko_2.mq4 you guys are great 8)