Euro Outlook
The dollar resumed its slide yesterday on growing concerns about the u.s. Credit markets, amid rumours of failures of more hedge-funds, and also a surprise fall in retail sales data that seemed to confirm recession fears… The euro rose to a new peak of 1.5650 this morning, and there are no clear signals showing a loss of upside momentum yet… The bearish sentiment on the u.s. Dollar prevails, but the sharp slide of the last days needs a consolidation… technically, the euro’s rally can still extend more & more for the above reasons, and the dollar may continue to fall as long as no special measures are taken by authorities to help reducing market concerns on the u.s. Housing problems and ailing credit markets… The single currency is navigating in uncharted area, and participants are awaiting to detect a major resistance that would cap the euro’s rally in the coming hours/days… Above 1.5650, resistance levels of 1.5735/90 then 1.5810/65 can be tested; but watch a break of 1.5430 for a prior correction, that may extend downwards… Our long-term objective was raised to 1.5965/1.6130 for the coming weeks/months, but we will place the new long-term stop-reverse level at 1.4940… beware central banks verbal interventions that may trigger a deep consolidation…
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