More to come for EURUSD. Despite verbal intervention from G7 officials about overvalued EURO and weak DOLLAR, EURO maintained its uptrend, erasing monday 130pips gaps.
What’s Next?
We strongly believe that fundamental is the main thing in determining currency value. Combination of stong fundamental ie, sound economic growth, high inflation will further boost EURO value towards 1.6000 or more in the near term.
US Economy
US economic release continue to print horrific data. three month in a row job loss, more to come subprime mortgage problem and high stockpiling of unsold housing inventory will continue to weight Dollar.
Interest Rate Differential.
Most economist forecast a further rate cut by the FED on the next meeting while ECB will hold interest rate at multi year high at 4%. This will attract CARRY Traders to hold EURO against DOLLAR.
Conclusion
There is no reason to hold Dollar. In other words, STAY AWAY FROM DOLLAR!
How to make money from DOLLAR weakness?
- Convert your DOLLAR based forex account to other currency such as EURO, YEN and AUD
- Buy other currency against DOLLAR on retracement.
We are out from EUR/USD at 1.6000. Wait for some retracement before entering long again