WHAT EURO DIRECTION IS LIKELY IN THE NEAR FUTURE

Having seen wild ups and downs in the Euro within the past few weeks, the long term investor asks for the likely mid-term direction of the lead European currency. While it is incredible that the Euro was able to hold itself at the higher end of its 10 years range throughout this massive finance crisis, we still believe that this is just the result of a dismal US situation.

Money printing, however, may be necessary in the not too far distance. It is very unlikely that currently planned savings will bring back on track several European key economies. The savings plans can only lead to more hardship. Economic stimulus and employment programs will be needed to lead to an expansion of economic activities. This however can only be reached by adding liquidity to all markets.

I am sure, once Germany may experience an economic backdrop their hardline finance policies will suffer their first crack. Time will tell. However, this or other scenarios which the economic savings plans will cause, should ultimately lead to a drop of the Euro.

Although the Euro has recently slightly rallied against Yen and Swissie the outlook remains weak. Should US economic activities pick up speed during the course of the election process next year, the next major directional move of the Euro may be down. Nevertheless, we are still hovering near the key 1,40 mark, and 1,30 was solidely defended recently.

One has to remain cautious and follow market activities closely as the recent price swings can be deadly once you as a trader are caught on the wrong side of the move.

Good luck trading this week.
Yours sincerely,
Gerhard