EUR/USD view for week FEB/18/2007

I. Notes:

Because the market is real mess now, this time I will do some long term view, and will give no special recommendations :)

I also will include USD/JPY, because at this point this couple is more clear for trading.

---

II. USD index:

Weekly:This picture is unchanged for monts. Upper blue line is long term resistance. Brown line is old wedge support. The second blue line is probably the support of the USD downtrend. I say "probably" because is not clear where exactly this line must be placed, also there is no confirmation for exact same line in EUR/USD. The pink line is short term support.

Daily:The pink line from weekly chart is the support here, shown in blue. The figure looks like a triangle, so the price may fall much next weeks. However this is unclear.

---

III. EUR/USD weekly:
Same wedge/parallel channel here. The resistance is not shown, but is there :-)
Note the pink line. EUR raised 3 times, but was unable to break it.

---

IV. USD/JPY 2 days chart:
On USD/JPY front, we see that the USD decline since several weeks. Channel is almost perfect. At the moment USD raising to the upper boundary of the channel. However it may be a wedge too. In order to go long, we will need to see break on pink line, which will indicate there is NO wedge.

---

V. Summary:

This is almost the same as I wrote 3 weeks ago:

I believe FED will cut more, US stockmarket, Gold, Oil, EUR will raise. However in short term we will could see a dollar rally.

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!

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!

No EUR/USD analysis this week.

Because I was travelling in the weekend, No EUR/USD analysis this week.

Probably will do tomorrow.

EUR/USD view for week JAN/14/2007

EUR/USD view for week JAN/14/2007

---

This week, the weekly view will be short, also I am writing this in Thursday.
As you may know, at the moment the market expect 0.50% rate cut, before (!!!) the FOMC meeting. Then some "experts" expect FED to cut another (!!!) 0.25%.

---

EUR/USD 1 day chartHere we see the old wedge in blue. The USD failed to test it @ 1.42. There are also a brown channel up. However, it failed to make new high - old was 1.49.66.

This looks to me as double top, but everything depends what will happen next couple of days.

Possible bearish scenario is to see 1.45 (brown) testing.

---

EUR/USD 4h chartHere we see same brown channel, and there are a small channel up (blue). Current fall may go there - 1.46.90, or may stop on pink line 1.47.40.

---

EUR/USD 1h chartHere trendline colors are not "related" to preivious charts.
I am not sure if we had this mini channel (brown), but is broken. Pink line is hypotetical, ASSUMING we hit bottom 20 min ago.

Once again, according to previous chart targets are 1.46.90 or 1.47.40.

---

Happy week and happy trade :-)

EUR/USD view for week DEC/17/2007

I. Important news from the week:

1. Gold still correcting (~$800), even FED worries for ... the inflation.

2. Market decline

3. Currency debase continue. FED cut rate, but with 0.25%. Market was disappointed. USD raise, Stocks was down.

4. Day after FED cut the rate, FED announce that they prepared co-ordinated action with ECB, BOE and Switzerland National Bank for adding liquidity on the markets. They will do two auctions in DEC and two more in JAN. On this auctions, they will lend out "some" USD to other banks, funds or persons. Because I am not a "pro", you can read here.
All this is nothing more than a co-ordinated helicopter drop.
Unfortunately for Bernanke and Co. the stocks once again dropped. USD raise to new high.

5. Crude raising ~$92.

---

II. The parallel uptrend (old wedge):

USD index weekly chart:


Is it clear now that USD bounced. Bounce will continue to 78, because there are a strong resistance that was formal support from the wedge. I am pretty sure it will hold, and once USD index go to 78, it will began to decline.

EUR index weekly chart:

Is not sure if USD raise or XEU going down, but here we have a mirror image of USD index. The support (resistance of USD index) must hold.

EUR/USD weekly chart:

Same chart as XEU. Remember colors of the trend lines. No comments here.

EUR/USD 1 day chart:

The daily chart would be bearish, but last day with huge drop to 1.44.20 shows the reversal. The brown channel is sure broken, and pink channel is probably broken too. We could see a rally here to upper boundary of the pink channel, but generaly the trend is down to the blue line @ 1.42.

EUR/USD 4 hours chart:

Here we could see the pink channel again. could be broken, could be not broken.

---

III. GBP/JPY H&S:

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

Currently GBP is no trade.

---

IV. Summary:

No trade recommendations this week.

I personally will no trade, mostly because of the Xmas and New Years holidays.

From the other side - The market is irrational now, and liquidity is everywhere. You can not judge what will happen if at the same time both FED and ECB dropping money with helicopters and B-52's.

As I wrote

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.

As we saw Canada cut their rate, hoping CAD to be debased against USD.
UK cut rates too, because guess what? - They have subprime problem too. This rate cut will debase their currency too.

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!!!

---

IMPORTANT NOTE:
Next week there (probably) will be NO weekly view.
On the New Years Day there obviosly will be NO weekly view eighter.

EUR/USD view for week DEC/10/2007

I. Important news from the week:

1. Gold still correcting (~$800)

2. Market decline

3. Currency debase began - Canada cut rate, UK cut rate

4. Crude still correcting ~$89 - they are joking, it must go higher very soon.

5. Paulson create a Subprime bailout plan - they will help selected people. This it is very dubious and can bring strange reaction from the people who will not be helped, I will not discuss it here, but for sure will write article in http://www.novini.net/ (in Bulgarian)

---

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.

GOT GOLD :-)

---

III. The parallel uptrend (old wedge):

EUR/USD 4 day chart:

Blue channel up. May be broken on upside, but then price went back into the channel.
Is interesting the second blue line - it is broken too.

EUR/USD 1 day chart:
Brown line is wedge support (see 4 days chart). Blue lines formed an uptrend channel. Unfortunately, this channel is definitely broken last week. Friday price raise, and currently testing blue channel as resistance.

Last week I described two scenarios. Now I believe we have bearish scenario with target 1.42.

EUR/USD 4 hours chart:
Here is EUR/USD 4h. Blue channel is uptrend from previous chart. Pink is the downtrend. Currently the price testing blue channel (now resistance)

---

IV. FED meeting speculation

I believe the EUR/USD is no trade at the moment. Only good possibility to make money is the FED meeting.

There are 3 scenarios:

1. They DO NOT cut rate - bullish for the USD.
2. They cut 0.25% - bullish for EUR.
3. They cut 0.50% - even more bullish for EUR.

Which one will be?
I think there must be a cut because the other central banks cutting.
Anyway we can wait for the news and to trade the spike.
I will post update for this later in the coming week.

---

V. GBP/JPY H&S:

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

Currently GBP is no trade.

---

VI. Summary:

I can say absolutely the same as previous week:

No trade recommendations this week.

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.

As we saw Canada cut their rate, hoping CAD to be debased against USD.
UK cut rates too, because guess what? - They have subprime problem too. This rate cut will debase their currency too.

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!!!

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.

GOT GOLD :-)

---

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.

---

IV. GBP/JPY H&S:

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!!!

EUR/USD view for week NOV/26/2007

Hi,
There will be no publication this week, since there are not much change from last week. The only difference, is that now I am bullish on EUR, since it keep hitting new highs. Will post some charts very soon or tomorrow.
However trade carefully because we can see reversal very soon, but probably not this week.
Happy week and happy trading.

---

EUR/USD - 4h chart
parallel channel up.

---

EUR/USD - 1h chart
"almost" :-) parallel channel up.

Also note the upper thin line (not the blue one), that is broken. This is the line from the parallel channel which I call "old wedge". It was broken Friday, but I can not do any estimations, since it is on weekly chart. Anyway, we will see where market go, and will do better estimation

EUR/USD view for week NOV/19/2007

Not much things changed since last week...

I. Important news from the week:

1. Gold correcting ($785)

2. Market correcting, while JPY raise (unwinding carry trade).

---

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.

GOT GOLD :-)

---

III. The parallel uptrend (old wedge):

EUR/USD 1 week chart:
No change, price is inside the channel, probably will go down. In case it go up, it will not show some significant new high.

EUR/USD 4 hours chart:
For the moment this is just a potential H&S, but we will see.

EUR/USD 1 hours chart:
Here is the "speculative" chart. This chart was done Friday.

Blue channel down - target is 1.46, because there we have longer term support (pink), then up.

Currently EUR/USD open up, with 20 pips gap. It is above the channel, but I think soon it will fell inside. I am still unsure if I will trade this gap. Better wait 1.46 and go long

---

IV. GBP/JPY H&S:

GBP/JPY 1 week chart:
No chart, but we still have huge H&S formation. Target is under 200.

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

---

V. Summary:

I can say absolutely the same as previous week:

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

There is one very important thing that helping USD - everybody is against it, even supermodels like Gisele who demanded her contract to be in EUR :-)

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!!!

EUR/USD view for week NOV/13/2007

I. Important news from the week:

1. EUR/USD hit 1.47.50, Gold passes 845 USD, CAD now "costs" 1.10 USD, GBP/USD = 2.10.

2. JPY rising against everything, but mostly against GBP and EUR.

3. "If USA want to debase their currency, we will respond" - French president Sarkozy said.

---

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.

GOT GOLD :-)

---

III. The parallel uptrend (old wedge):

EUR/USD 4 days chart:
What we have here? Price go to upper channel line, even broke it for 1-2 hours, but then fall inside the channel.

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

EUR/USD 1 days chart:
Here we have the channel I show last week. Price remained inside the channel ALL the time, even when hit 1.37.50. Now EUR need to go down at least to 1.46. If this level is broken, next target is brown line - 1.41

EUR/USD 4 hours chart:
Here is "speculative" chart. Unfortunately not so speculative right now. Target is 1.46. There are also a bearish wedge (not shown), with target down to about 1.45-1.42 - never checked exact target, but wedge is there.

---

IV. GBP/JPY H&S:

GBP/JPY 1 week chart:
I usually do not trade GBP, even it is probably better than EUR.
However, now we see something interesting here:
Here we have huge H&S formation. Target is under 200.
In case you play this, note you will pay huge ammount of overnight interest every day to your broker.
Note GBP/JPY and EUR/JPY open with a gap, I will probably trade it.

---

V. Summary:

I can say absolutely the same as previous week:

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.

>>> I will add that French president Sarkozy said "If USA want to debase their currency, we will respond".
We still not know what this response will be, but is easy to imagine what he means.
Note I respect Sarkozy for what he done for Bulgarian doctors in Lybia, but we will see.

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!!!

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.

GOT GOLD :-)

---

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!!!

EUR/USD view for week OCT/29/2007

I. Important news from the week:

1. Gold stands high - 785 USD, crude oil is 90+ USD

2. HUI is still 400+.

3. USD continue down to sinkhole, but lose momentum. Yet, EUR/USD open~1.44.10

4. FED will have meeting next week on 31th OCT. Market already calculated a 0.25% rate cut - more for this later

---

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.

GOT GOLD :-)

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.

Unfortunately, we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.

---

III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Not much change since last week. Still believe it must move up now (USD up, EUR down) We may expect now a rally in USD up to 79+. If the resistance is broken, rally will continue to ~81.

EUR/USD 4 days chart:

Same situation as week ago. It must go down, but we will see.

EUR/USD 4 hours chart:
Here is "speculative" chart. We are on the top of the channel now we will go down.

EUR/USD 5 min chart:
Chart is not shown, but as I predicted we have open the week with a gap. The gap is between 1.43.90 (close) and 1.44.10 (open). Price for sure will go down and will fill the gap. We are take this short EUR/USD trade already.

---

IV. Summary:

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

It is very important what Helicopter Ben and friends (FED) will decide:

o If they kept the rate unchanged, USD will raise a lot - 50-100 pips or more.
o If they cut just 0.25%, USD may raise, or may fall, but in any case will be small move.
o Some believe FED will cut another half percent. In such case USD will totaly fall with 50 pips or more.
o Some, even suggest FED will cut half percen + half percent on discount rate. This will be total disaster for USD.

We will write about this soon, when we do a research and see what others think about it.

Happy week and trade!!!

---

V. Carry trade with AUD/JPY:(As usual) Will not be updated this time, probably tomorrow.

EUR/USD view for week OCT/22/2007

I. Important news from the week:

1. Gold stands high.

2. HUI is 400+.

3. USD continue down to sinkhole, but lose momentum. Yet, EUR/USD hit ~1.43.20

4. Black Monday Anniversary - some video to remember it here

Kids looking at dollar sinkhole

---

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.

GOT GOLD :-)

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.

Unfortunately, we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.

---

III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back from the parallel channel support. Then price went to the resistance (formal support) - brown line and bounced back down.

We do NOT have double top (bottom), because second bottom is lower than first one.

However, now, we can see the price is back on the support. This is very important, since on EUR/USD situation is not like this. We may expect now a rally in USD up to 79+. If the resistance is broken, rally will continue to ~81.

EUR/USD 4 days chart:
On EUR/USD we see similar things, but the second high is not on the resistance, but lower. This happened before, so it may happen now too.

We also have bearish divergence on RSI, not shown on the chart, but is there. However we do not see the same divergence on USD index.

EUR/USD 4 hours chart:
Here is "speculative" chart. Mixed signals. Better wait and see what will happen...

---

IV. Summary:

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

Happy week and trade!!!

---

V. Carry trade with AUD/JPY:(As usual) Will not be updated this time, probably tomorrow.

EUR/USD view for week OCT/15/2007

Because basically last week nothing happened on EUR/USD front, this week I will keep the analysis KISS - Keep It Simple Stupid. If you are first time reader, I'm encouraging you to read previous EUR/USD view for week OCT/08/2007, since most of general "things" are discussed there.

I. Important news from the week:

1. Gold stands high.

2. HUI is 400+.

3. US Stockmarket new high, records on Dow, S&P500.

---

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.

GOT GOLD :-)

As you can see, back in 1992, USD was down once 78.43, well, we had similar reading, I can not say how the recent low was, but was close to 78.43.

No comment here.

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.

Unfortunately, last week we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.

---

III. The parallel uptrend (old wedge):

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back. Then price went to brown line and bounced back down - this is shown well on 1 hour chart on EUR/USD. We could have double top, but is still early to trade it.

EUR/USD 4 days chart:
Same situation here.

EUR/USD 1 day chart:
Here you may see those double top forming, but is still early. Also I said "forming", we do not know if this is double top or not.

EUR/USD 4 hours chart:
Here is "speculative" chart. Mess is full and we can not decide what will happen. Downside is 1.40.50 - support, then 1.40.00 - very strong support. Upside - 1.42.20/30.

I personally am bullish on EUR, even is a bubble. But bubbles must be exploited :-)

---

IV. Summary:

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

Happy week and trade!!!

---

V. Carry trade with AUD/JPY:

Will not be updated this time, probably tomorrow.

EUR/USD view for week OCT/08/2007

I. Important news from the week:

1. Gold stands high.

2. USD bounce a bit.

---

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.

GOT GOLD :-)

As you can see, back in 1992, USD was down once 78.43, well, we had similar reading, I can not say how the recent low was, but was close to 78.43.

Well congratulations. Last week, we were in uncharted waters, then we had a bounce so we are now back in "normal" levels. We will see for how long...

For first-time readers, and those who do not know, the wedges are reversal patterns. This wedge is bullish for USD index, no matter what people say for US economy, debt bubble etc. I am sure that at the end of the year, the USD will be lower, but wedge suggest we will have one bounce before that.

Unfortunately, last week we had proof that our beloved wedge, is wedge no more.
It was transformed in parallel bearish channel.
Now, even if we see USD up, it will be not an uptrend, but just a correction.

---

III. The "wedge":

The wedge? What wedge? Did you see a wedge? I don't see a wedge? :-)

There is no wedge. Not anymore. What we have is downtrend from 2006 year.

USD index weekly chart:
The wedge is transformed into a parallel channel. Then the price bounced back. I believe the price will go up to the pink line, which is old wedge support. A test will occur, and if the resistance hold (I think it will), we will have future drop. In case, the resistance not hold, we will have a rally to upper wedge line - around 81. Brown line is added, but I think is not so significant (you will see why in next charts)

EUR index weekly chart:
Don't panic :-) Here I did an un-ortodoxal thing, I flip the chart. Here we see same lines, with same colors. Brown line "pointing" totally different "place". Pink line looks much more significant, also the price is on the line.

USD index / EUR index ratio weekly chart:
Similar to others, here you are USD index / EUR index ratio. Brown line again is "pointing" "wrong".

EUR/USD 4 days chart:
Here the price is exact on the pink line. We may expect EUR to go up.

---

IV. Summary:

EUR will rise now, USD to fall.
We may have some future bounce to 1.40, but no more.

Happy week and trade!!!

---

V. Carry trade with AUD/JPY:

Will not be updated this time, probably tomorrow.