EUR/USD Trading

[Tiger21]

EUR / USD – Ride the momentum. EUR / USD will go to $1.50 as investors seek additional risk and sell lower yielding currencies in favor of higher yielding currencies. From the $1.45 point to $1.50, there is a lot of money to be made in the next month or two and there is a lot of trading history in this range from 11/08 to 3/09 and 8/09 to 9/09. $1.50 will be the key psychological barrier in the uptrend, but at this point $1.45 should provide key support levels. In general the dollar is declining against all the major currencies because the dollar is the cheapest funding currency and given how liquid it is, it is easy to trade against foreign markets. In addition, the Fed has been maintaining its commitment to a low interest policy whereby rates will not be raised until they are certain the US economy is coming out of the recession in a good shape. Bernanke is well aware of the risks of a double dip recession and doesn’t want to cut credit too soon so as to cause the US economy to contract again at the onset of it righting itself.

[msmr]

EUR heading towards 1.4700

[aliali1972uk]

or may be time to sell of

[roberr]

looks like we will hit 1.48 before going down

[usbajonas]

Should gain strength with positve numbers out of ZEW tonight

[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.

[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.

[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.

[tomo1]

The USD sank to new lows again........
inflation pressure....