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Eurozone Core, USD Index & Swiss Knife
Watch the risk of contacgion into Eurozone core nations, as well as the USD Index monthly rise and the broadening gains in the Swiss franc.
If we look at, say, a daily chart since around January, long-term shorting EUR/USD looks like a no-brainer. However, at the time, with lots of false-breaks or retracements, it was nothing like so easy, despite Ashraf telling us back then it was probably going down to 1.32. 1.32 now seems like a distant memory :-) Have the fundamentals really changed since those days? If anything, things have got worse for the Euro. So I think we should not be surprised how far down it can go, but equally, we should never be surprised how far back up it can bounce (before finally resuming it downward spiral).
That has nothing to do with fundamentals of markets only with liquidity crunch.
When both liquidity and capital is low, technical analysis , elliot waves etc. regularly fail.
May I contribute. The euro never retraced beyond its previous highs since Dec 09. Not expecting it to go to 1.30.
Euro must fall below what value (other than its previous low around 1.18 something) to signal the next leg down is beginning ? There are false breaks to the north as mentioned by others, but there are also false breaks to the south as on Friday.
Also, better to short it against the USD or the yen ? If risk aversion to return, the yen is bound to rise and the euro may move more with the yen ?
EURUSD did have a false break back in April 11-13 before succumbing back into the downtrend.
Id have to see a proper close above 1.2130-40 in Asia. No, it is not called "moving the goal posts"
Ashraf
But it's unlikely, that euro will go north any further than it did already.
The main question is equity markets. They are about to crash big time. Will PPT manage to hold them at these levels? if yes, then there is the chance that euro will stabilize.