Euro Outlook
Last week, concerns about the u.s. subprime mortgage sector pushed investors to get rid of their foreign assets to ensure liquidity; and on that, the dollar recovered driving the euro down to a low of 1.3608… the euro’s slide has been expected as its last rally from 1.3371 which extended to 1.3852 needed a consolidation… however, the correction was very rapid and rather big (below its ideal retracement area at 1.3665); and this can mean that the upmove met a major top at 1.3852, i.e. that the downtrend may still continue for a while… the next support levels to watch below 1.3608 are 1.3585/55 then 1.3485 which is pivotal on long-term perspective… but, we will continue to consider the fall to 1.3608 as a completed correction, and we will be expecting the rally to revive from there, gaining momentum in the next sessions and retargetting 1.3857, on its way to next resistances at 1.3910/55 and 1.3985/95 then higher… the euro’s long-term trend will remain in a euro-bullish mood unless a daily close below 1.3525 is seen…
New signals for spill over the housing slumps.
The dollar advanced against the euro during the last few days from the record low level of $1.3852. The investors avoid riskier assets and repatriate dollars. There are signals for spill over the housing slumps. With the start of the new month the investors will continue expecting new signals for the US mortgage situation and the most important employment sector. It is expecting the US economy to add less new jobs compare with the prior month. The trading will break below 1.36 level but some of the traders will try to buy euros for dollars expecting new record high euro/dollar levels.
The Crude Oil rose with 4.7% for 8-hours.
The Crude Oil rose fast after the recovery by Monday and Tuesday this week. The Sweet Crude Oil Future for September recovered to levels of $72.88 while just for 8-hours up to $76.33. The raise of the Crude Oil is with 4.7% and is highest jump for the last few months. The Crude Oil is close to the record from the mid of July 2006 at $78.09. Most of the analyzers predict levels of $95.00 this year and test of the psychological level of $100 for the Brent. The expanding of the world economy and needed by more Crude Oil will cause serious problems of all sectors of the world economy. The raising prices of the Crude will push the inflation in all countries that will cool the economy and growth. At the same time the dollar up with over 100 pips against the euro that helped for the so huge Crude Oil raise yesterday.
Euro Outlook
Finally, the euro was able to unfold a correction, after tempting several times, but without success, to overcome the resistance trendline (joining the tops for the last months) that lies at 1.3865… technically, we think that the euro is in an intermediate corrective phase that has an ideal objective of 1.3670/60 (38.2 pct fibonacci retracement), possibly 1.3640, maximum 1.3615 (not favoured), before a new rally occurs targeting 1.3910/50 and 1.3990/1.4000, then possibly higher… the u.s. data releases today and tomorrow will help finetuning the market’s present sentiment towards the dollar, worsening or tempering a bit the generally negative view on the greenback… the euro’s short-term trend will turn to positive on a sustained intraday break above 1.3730 calling for a revisit of 1.3785/1.3820 area; but the medium-term trend will remain euro-bearish unless an hourly close above 1.3795 occurs, and that will imply a retest of 1.3855/65… for the longer-term the euro will stay in a euro-bullish mood unless a daily close below 1.3525 is registered.
Euro Outlook
The euro stays in an uptrend mood, with sentiment weighing on the dollar by concerns over the weakness of the u.s. subprime mortgage sector which might hurt the wider u.s. economy… the dollar is now seen as a weak currency and participants expect it to fall further… the euro hit a new high of 1.3852 yesterday and no signs of exhaustion detected yet: still looking for 1.3860/85, perhaps a correction there, then 1.3910/50 and 1.3990, then possibly higher… the consolidation which we expect should have a potential for a retest of 1.3690/65 area; but due to the market’s present sentiment towards the dollar, the correction may be a small one, and in that case it may end at 1.3750/30… the short-term trend will change on an intrtaday fall below 1.3770 calling for a revisit of 1.3735/05… the euro’s medium-term trend will remain to the upside unless an hourly close below 1.3750 occurs, and that will imply a retest of 1.3690/65… for the longer-term the euro will stay in a euro-bullish mood unless a daily close below 1.3525 is registered…
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