EUR/USD view for week JAN/28/2007

I. Important news from the week:

1. FED cut 3/4 % in non scheduled meeting. A fiscal stimulus was proposed too, at the moment it will be $300-400 tax back.

2. Market continues down, but may be formed a bottom.

3. Market expects fed to cut 1/2 % in their scheduled meeting on 30st JAN.

4. Gold hits $924 :-)

5. Crude correcting ~$92, because there are recession worries. I never understood that, but this is the game rules :-)

---

II. EUR/USD weekly:Here we finally see EUR tested the old wedge (brown) and bounce from it (I know the line is not very precisely drawn). Now EUR must continue high.

Because parallel channel has broken upper line, I may suggest two target possibilities - the two blue lines.

---

III. EUR/USD 1 day chart:No lines here, but we see higher lows and lower highs. This is a triangle. I believe this triangle will be broken on the top this week, and we will see 1.49 at first time.

Note that price go to upper triangle boundary, so we will see 1.48 "for sure".

---

IV. EUR/USD 1 hours chart:This chart is attached, because as you see short-term EUR/USD is mess. All we can see are higher highs and higher lows. Unfortunately I can not see any reliable trendlines.

---

V. Summary:

I believe FED will cut more, US stockmarket, Gold, Oil, EUR will raise.

I still think EUR is just a paper, but as I said before, FED is in panic mode now and will sacrifice the dollar, in order to save stockmarket and to avoid recession and deflation. Of course I do not believe we will see deflation except in housing sector, I also believe the US will fall into a recession anyway. But I still believe US stockmarket will raise in USD terms because of inflation and money printing.

Happy week and happy trade!