EURUSD - Trends, Forecasts and Implications (Part 3) - page 708

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What's on the eu for tomorrow?
 
Tantrik I'm sorry, do you have a specific TS, or do you trade in general a bit at a time?
 
sidi1:
What's on the eu for tomorrow?

Bedtime thoughts....

I've got the H4 marking "off", I'll be reviewing the structure at the weekend.

 
History is repeating itself, and everyone can make good money on this repetition! In July 1944, 740 financial experts from 44 countries met at the Bretton Woods Hotel for a conference at which they created a new economic reality. They established the dollar as the world's reserve currency. They established the International Monetary Fund. They created the World Bank. Now, 67 years later, there will be another conference. The attentive observer will find much that is familiar, reminiscent of the events of Bretton Woods. It will be held at the same venue, and many of today's influential financiers have also been invited. Among the guests are former Fed chairman Paul Volcker, former British Prime Minister Gordon Brown and former Clinton economic adviser Joseph Stiglitz. Who is the organiser? George Soros is one of the biggest investors in the world who, in his own words, sees the need to reorganise the financial order. According to Soros, the dollar is already losing its status as a reserve currency, but influence is gradually shifting to the euro, gold, oil and other commodity assets. The reason? The dollar is losing value too fast, central banks and investors have nothing to do but walk away from the dollar to avoid large losses. That is why tangible assets are appreciating so rapidly. That is why we are facing a historic rally in oil, gold, silver, food and base metals.
 

Billionaire investor George Soros believes that last week's decision by the ECB to raise its key interest rate to 1.25% was "inappropriate" as the ECB's uniform policy for all monetary union states and a strengthening currency would be extremely detrimental to peripheral countries in the region, which are forced to implement fiscal consolidation.

Strategists at Bankhaus Metzler believe that the period of the strong euro will soon come to an end. From their point of view, in the nearest future EUR/USD still has a chance to rise to the resistance level of $1.4580, but then within the next three months it will correct down to $1.38/35.

Analysts at JPMorgan say that if the euro fails to overcome the level of $1.45, the exchange rate will decrease in the short term. Experts advise to buy the single currency on a decline.

 

The dollar is looking increasingly unattractive amid expectations of soft monetary policy from the Federal Reserve /Federal Reserve/, even as Europe tries to solve its own financial and economic problems.

>"The main problem is the weakness of the dollar," says Andrew Wilkinson, chief market analyst at Interactive Brokers in Connecticut. Meanwhile, Wilkinson admits he is "baffled" by the euro's resilience.

 
Meanwhile, investors' attitudes towards the euro are not entirely positive. The ongoing debt problems in Portugal, Greece and Ireland continue to remind investors that the single European currency carries real risks.
 

New York FX: Sovereign debt problems have receded into the background - the euro is back on track

01:21, 15.04.2011
Germany, Schaeuble: comments on Greek debt restructuring are no indication of a change in Germany's position

USA: Jobless claims increased by 27,000 to 412,000, higher than expected

US: March, PPI +0.7%, net PPI +0.3%

ECB, Wellink: default will have serious consequences

EU, Wren: European economy too weak to postpone Greek debt restructuring

Germany: yuan may be added to the IFAC SDR basket

Noda: Japan will keep a close eye on currency markets, if necessary we will ask B-7 to continue FX intervention

Fed, Plosser: Rates may be raised as early as 2011

US Treasury yields up 4bp to 3.50%

S&P stayed essentially flat at 1315

Oil rose $1.25 to 108.35 and gold closed near record highs at $1474.

EUR/USD declined in European trading, absorbing stops below support at 1.4370/75 and in the US session it was actually recovering lost points. The pair made it to a high of 1.4501, helped a lot by the buying at 1.44 by the Middle East investors. The Euro has nevertheless managed to test the resistance at 1.4520, followed by the barriers at 1.4530 and 1.4550.

USD/JPY recovered after a short fall under 83.00. Rising US Treasury yields as well as Japanese Finance Minister's statements that Japan continues to monitor exchange rates sent the quid to 83.50, which now acts as resistance.

The AUD/USD rally was helped by a commodity market rebound and the pair broke above the 1.0550 level.

The franc lost some of its earlier gains as risk aversion eased somewhat. EUR/CHF closed at 1.2933.

 

Analysts at Mizuho Corporate Bank believe that the single currency is overvalued against the US dollar by almost 20%. This conclusion is based on a comparison of the purchasing power of the dollar and the euro.

On April 12 the Euro reached its maximum level since January 2010 at $1.4520, deviating from the purchasing power parity by 18%.

On 7 April the European Central Bank raised interest rates for the first time in almost 3 years in a bid to contain rising inflation. The bank stresses that another rise in the cost of financing in the Eurozone in the middle of the year is inevitable. In the second half of the year, rate hikes are likely to stall due to debt-laden peripheral countries in the region demanding lower rates. Mizuho also reminds that the US quantitative easing program will end at the end of June, which will provide some support for the US currency.

The EUR/USD could fall below $1.40 according to the forecasts.

 

France, Lagarde: SDR could be used as a way to get China to cooperate more on currency issues

02:33, 15.04.2011
- Eurozone is doing better than the US, Britain and Japan

- European states that fail to meet their obligations to reduce budget deficits should automatically be subject to sanctions

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