EUR/USD close to bottom?
Deflating debt across the world is providing support for US dollars across the world. OPEC sells OIL in US dollars. For decades people, countries and companies borrowed dollars and promised to pay back with interest. The time to pay it back has arrives and borrowers must find dollars. But how high can the dollar go? Will QE3 provide head winds? What is the long term picture for the next few years?
On July 6, the EUR/USD fell to a new 2-year low.
The reason for the drop?
From a fundamental standpoint: nothing.
- There were no new devastating reports out of Europe to explain the euro’s weakness.
- Nor good economic news from the U.S. to explain the dollar’s strength.
- Nothing other than the “eurozone worries “…which, frankly, have been with us for what, two-plus years now?
In other words, market fundamentals failed to give FX traders a tell-tale signal that a drop to a new low was imminent.
At least one technical analyst did see the drop coming in his charts and alerted his readers to the move with enough time to act.
Update For: Wednesday/Thursday, July 4/5
Posted On: Tue, 03 Jul 2012 14:57:51 GMT
EURUSD Last Price: 1.2605
[Topping] The impulsive but incomplete decline from near 1.3500 and the corrective recovery during the first three weeks of June dictate a bearish outlook. From below 1.2744, and ideally below 1.2693, the euro should resume its decline.
(Excerpted from Jim Martens’ Currency Specialty Service, provided by Elliott Wave International.)
EWI Senior Currency Strategist Jim Martens is one of the most sought-after FX strategists and trading instructors in the world. His technical, Elliott wave approach to the FX markets has been featured in numerous forex publications including ForexPros, FX Street, Trading Stocks and others. Jim has spoken at several trading events including The Traders Expo and Traders’ Library Trading Forum.
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