EUR/USD view for week DEC/03/2007

Not much things changed since last week...

I. Important news from the week:

1. Gold correcting again (~$780)

2. Market raise

3. JPY declining

4. Crude correcting and is back to ~$89

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):

USD Index:
There was unexpected rise in USD in Friday, after US stock exchanges were closed. This could be everything - stops, trend reversal or something else. Note that parallel channel (blue) was first broken, then bounced. Is better to wait and see what will happen.

EUR (XEU) Index:
Because it was possible the action in USD to be actualy an action in EUR, we put the chart in EUR index (so called XEU). Here we can see absolutely the same action as in USD - (blue) channel is broken, then bounced down.

EUR/USD 1 day chart:
Brown channel up. May be broken, may be not. Technicaly is broken, but with 20 pips.

In case the channel is not broken, there is a triangle (not shown) and once the triangle is broken we will see new high, may be almost 1.50.

This is the bullish scenario - 1.50

In case channel is broken, we will see 1.42. This will NOT happen imediately -

bearish scenario - 1.42,

also this may happen even if EUR raise first, but not make new high.

I believe this is probable scenario - 1.48-1.49, then down to 1.42

EUR/USD 2 hours chart:
Here is EUR/USD. Blue channel is downtrend from the high ~1.39.70 or whatever it was. The brown line, is a parallel line which may be is support. The pink line is support.

What next - next, I think the EUR must go to upper, and to sest the formal support. Sinse the break is with 20 pips only, EUR may enter in the channel again.


No chart, but we still have huge H&S formation. Target is under 200.

There are very interesting development, which I will covering during the week.

Do not trade GBP/JPY. It is extremely volatile.

V. Summary:

I can say absolutely the same as previous week:

No trade recommendations this week, I personaly have long position on EUR/USD.

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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