Euro Dollar

This week we have seen some unwinding in USD and Yen mainly due to thin markets and lack of liquidity which is ontributing to the lack of buyers. I was going back through my diary looking for an entry early this morning that my wife wanted when I came across the following entry.

"EU reaches 1.50 correction will be needed to 1.45 before 1.60"

I had scribbled this out on November 11th when it reached the 1.50 level. It made me stop and think for moment given the strength seen in USD this week. Is it really possible that this level will be seen again soon. I would have to say thay maybe this could happen, looking at the charts their are tons of road blocks in the way, the path would be rocky indeed and given the emerging countries liking for the euro, then ultimately they might decide if 1.45 EU is in their best interests.

Looking at the other side of the argument, The USA has gone just silly this week they get one good employment number and we have so called smart commentators calling for the end of all stimulus and all fed help, have these people lost their minds. I was pleased that at the start of the week Mr Bernake came out as the voice of reason and spoke intelligently about one good employment report saying that whilst encouraged this would not sway fed policy in the short term and extra measures were still in play for the short to medium term.

I am not sure EU will reach 1.45 but technically and fundamentally its a very sweet long opportunity if it does and the ride from there could be long and profitable, we will watch as always in anticipation.