what the fed did for helping the economy, is for the short distance....you have to think on the long distance
Germany will have around 1.8% growth this year. Next year it will be closer to just above 0% according to forecasts. Germany is the jewel in the EU economy, and influences a lot of the bloc's outlook. If there is a total unravelling in the US economy, panic - then of course 1.70 is a possibility. I personally, think it CAN happen next year - but also would be very surprised if it happened this year. However, there is a growing animosity against this economic crisis and its fallout - and this is being accentuated with the urgency and political show-boating in the US. Perceptions are that all of Wall Street investment banking are corrupt, and so are the power politics in the US. Also, the collapse of principles and sound judgement giving way for hasty decisions does not extend any trust towards the policies. It seems like the situation is out of control, and frankly I do not see the housing market or the US economy improving in the immediate future. That means that the longer term trend will be deteriorating for the USD, and the "collaborative mood" around the world is strongly faltering. Today Germany's finance minister Steinbrücker blasted the US for their lack of control and bad judgement. Later we will see much more political and economic fallout from this crisis - it WILL erode the USD. Also, in the short term we will probably see some interventions, but it is still hesitant since there is no clear practical outcome around this rescue package yet. Also, how effective will this be? If there is another crisis and bailout before December, I think perceptions will strengthen further that the US economy is unravelling slightly out of control and need much more changing to be able to adapt - before it can start growing again. Just now - nobody trust the USD, US politicians or the US economy. Today, I think the EURUSD is a good buy at below 1.4650... for targets of 100-200 pips. 1.48 is doable this week. Maybe even double up if reaching +75pips before over 1.48 ... Also, the market will continue very choppy and unpredictable - and at any time some intervention may crop up... or rumours shoot the market.
The current climate may be very good for scalping - until tomorrow morning when the Washington DC starts working again... Happy trading
European session will bolster EUR, in face of the US Washington DC confusion and indecision - as well as the Washington Mutual collapse. Peer Steinbrück, Germany's finance minister, talked up the EUR and down the USD - as well as saying the era of US economic dominance is drawing to an end... I think this will resonate more strongly throughout the European session today, and old latent irritations with US policies are surfacing. Former chancellor Gerhard Schröder now works for Russian Gazprom, and it seems like Germany and Russia will be growing closer. That could fuel growth faster in Germany, as Germany has become a leader on newer energy types, but also export industrial products. Therefore the German expertise and Russian resource supplies looks like a very good strategy for stronger growth.
Was able to tag 1.4620, 1.4600, and 1.4580 today for some decent profits on this trade. If we trade back above the 1.4900 level I will again look for new SHORT entry signals......lots of news influencing price action so be vigilant and take profits when you can get them (reduce exposure in historical news environment times).
Please describe the following situation to me as if I am a 10year old. The US is printing 1 trillion dollars to handle the financial crysis. If there is 1 trillion more dollars out there the value of the USD should fall. The more there is the less its worth. ??? I don't get it.
Well, no 1.48 EURUSD today, but it has been a wonderfully technical trading today with many very good opportunities. There was a burst from the expectations from the late Asian trading into the European open and that seems to have been the theme... steady push upwards, followed with a rush downwards forcing the waves. 1.4680 was the roof so far this session, and will be the (weak) barrier next time - although it has been the "median" for accumulated previous sessions. Anticipation for the "bailout bill" makes it a jittery market, and no doubt there will be a short USD surge when the deal is made next week. However, the failing economy and increasing debt will push the EURUSD higher - and that is the underlying trend.
......as I have been saying, the EU financial grid IS NOT suddenly going to be so much better than the US, that our dollar gets killed IN RELATION TO (key words) the EURO.......important to remember this. So then what happens, EUR/USD continues to drop as the elasticity between these two currencies tighten. EUR/USD now trading at 1.4379