EUR/USD view for week NOV/05/2007

I. Important news from the week:
1. Bernanke and the helicopter squad cut the rate as expected with 1/4 %, also cut the discount rate with 1/4 %

2. Gold passes 800 USD mark. CAD now "costs" more than USD and trades 1.00 CAD = 1.05 USD.

3. USD continue down to sinkhole, EUR hits 1.45.28. Every time we think USD short term bottomed, we see another fall.

4. Everything rising, commodities, stocks etc.

II. As I wrote before:

FED blew it!!! They totally destroyed the dollar in long term. I think they will inflate now, and stock market will go higher and higher, but only in nominal terms.

III. The parallel uptrend (old wedge):

EUR/USD 4 days chart:
What we have here?

Last week I had very high hope with the pink resistance line. However, as dollar falling into the sinkhole, the line was broken. May be this line will be the support we looking?

So, now, we have this blue resistance line (upper) which better not to be broken. Even on my chart EUR/USD price is on the line, because the line is freehand drawn, I believe the chart is incorrect so we may see 1.45.50 before we reach the resistance. Then I expect down, to the pink line, then up.

Note (not shown) EUR is overbought on both weekly and monthly chart.

EUR/USD 4 hours chart:
Here is "speculative" chart. We are on the top of the channel now we will go down, at least to 1.44.50 or even to 1.42.30.

Blue formation is bearish wedge, which may suggest the EUR will go down.

I do not think shorting EUR is wise.

IV. Summary:

Generally USD will rise now, EUR to fall, but play carefully.

Remember EUR is just a worthless paper as the USD is. Eurozone has own problems too. The only reason EUR go up against the USD is because Eurozone and ECB do not inflate as much as FED. Or may be they do now. Who knows. The inflation we see now, is actually from money supply increased 6 mo ago. So we do not know if ECB printing money or not.

There is only one real currency and is called GOLD. As you can see, gold rising against all currencies, not only against the USD. This may mean only one thing - inflation rising. Actually some people believes gold is bubble, but this is wrong opinion (will explain why I thing that some other time).

Happy week and trade!!!

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