EURUSD - 100125

revolver

5-years chart - uptrend

No doubt EURO against USD has been in an uptrend in the past 5 years, which correctly reflects the difference in the status of economic development and quality of fiscal/monetary policies between 2 continents. The core of EU, Germany, is a very powerful export-driven industrialized economy and has been always with big ambition historically. While another important member, France, not so strong but still in much better economical shape than US/UK. 20 years after the collapse of USSR and re-union of Germany, the 2 countries now seems being combining forces and set to revive the traditional domination of European civilization. Although the deficit problems and sovereign risks of PIIGS have been exposed to markets recently, the fiscal conditions of core EU countries are actually the best among developed nations. With the whole world facing an aging population, the health service cost per capita per annual in the socialized European health system is only half of the cost as in US. The trade between EU and Asia/BRIC have been steadily increasing year over year, and more importantly in a much balanced manner than the severely unbalanced trade between US and the world. With stronger fundamentals, EURO is a good potential to replace or at least share with USD as world currency.



1-year chart - consolidating in falling wedge

A setback after the exposure of Greece's fiscal problem. But the same problems for PIIGS have been there for a long time, why only now it triggers the sell-off? Think it this way, the touted the world's 7th economy if independent, California, is in a similar fiscal trap as Greece's, why there is no sell-off of US dollar? I would rather to see it a necessary adjustment after a 9-month bull run since last March, with Greece just as an excuse. If this is true, the downtrend since last December should not last longer than 2 months and then perhaps another 1-2 months range-bound consolidation before a new bull trend starts. I suppose the 1st peak of the previous bull run at 1.3738 should hold as a strong support which is also around 50% Fibonacci retracement. However if this broken, then the lower boundary of uptrend at about 1.27 would be the next very strong support area.


1-month chart - bearish

No proof for bullish view unless get footing above 1.4273.



Long term   -   bullish   -   No position
Mid term     -   neutral  -   No position
Short term  -   bearish -   No position

bucks

ding

dividend_growth

Germany and France may be ok, but Belgium, Greece, Ireland, Italy, Spain will drag them into the gutter,

coexist

revolver

3# dividend_growth


Not Belgium, it's Portugal.

guyuxiao

ding!