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EUR Shed A Thousand Pips
By Benny Nardino | August 19, 2008
Who would have thought that the euro would have receded its upward momentum to 1.4690 a few month ago? The last three weeks have seen over a thousand pips shed from the EUR-USD pair. Is this an indication or the sign of a crack on the wall?
Not long ago when the EUR/USD pair was on its ascendency, we were warning traders of the impending fall lurking. (I am on the impression that many took this to heart because of the volume of e-mail we receive at the moment.) At the time it seemed far fetched but soon, high volume traders began to see our lont-term prospect and started talking about it. Today, you could see that our analyses have now been confirmed.
The last weeks and months have seen decline in the EURo-zone economic numbers. A sign of significant weakness in their trade balances to the rest of the world. With this you have the looming recession cry, rising food costs and fuel prices. The escalating unemployment woes hasn’t helped either and these factors have not only restricted spending encouraged stunt economic growth. Although ECB may like to remain buoyant in their data reports but its hard to see a way out of this. From the above chart we have seen the eur shed more than thousand pips in less than a couple of weeks. Interesting we predict more to come in the weeks ahead. With money in short supply to the banks, businesses are having to brace themselves for the worst possible outcome.
In addition, we have also hinted that we see a consolidation around the 1.46/1.40 mark before a further downward slide to a possible 1.32/1.33 levels. These are lomg shots from here for now, a level the EUR is considered a fair price against the USD. How long the market could take to get there we don’t know. On the contrary, if this 1.40 support holds and the EUR/USD bounces up we will be expecting another higher-high than we have seen of 1.6035 resistance. For now we are not holding our breadthe on that possibility as yet.
In the mean time, we are playing safe with easy pickings, making money and maintaining our daily growth on the downward turn. Hope you have a great day of trading.
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