Monday March 22, 2010

Watch the Euro

I am currently looking to see if EUR/USD breaks below the 1.34-1.35 intermediate support level. If it does, all bets are off : SELL ALL risk asssets / GO SHORT, or both.

The Euro belongs to the class of assets which are termed "risk assets" - a category which includes currency-wise, EUR, AUD, CAD in the forex trading markets, and also the commodities complex as well as the general stock market. The last time that the Euro did its 50/200-dma downside crossover thing, we had the Aug-Sep 2008 economic/financial meltdown (see chart above). Not sure if this time will be the same or different as Aug 2008, or if it is just all a scare on the way back to recovery, but whatever it's going to be, one of the key things now is to watch the Euro.

Meanwhile, crude oil prices are in a trading range between 80-83, and gold prices are also in a range between 1100-1130. There are multiple factors pushing and pulling in these markets, including the usual supply/demand, geopolitical and various economic factors, but the EUR/USD does figure prominently enough.

See also :

1. Global credit crisis slows food and energy shipments, may lead to shortages
2. NYMEX crude oil prices drop below $79 as Euro falls against USD on Greece concerns
3. Greece could sell islands to cut debt : German MPs

(2010-03-22 23:32:55 SGT) [Biz] Permalink

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