Simultaneous Release at www.thegeekknows.com
Good day to all,
Looking through the order books of a few brokers, i noticed that many folks are currently in shorts.
Well, i have nothing against that as it is not my money, however in the name of research, let us explore deeper into conditions supporting a bullish scenario instead.
I must state here for the records that this is an article on a possible bullish scenario. I am in no way saying and have no means to predict the future that things will go bull.
I am rather sure for every reasons stated bull here, there is a corresponding bear reason.
1) Technical Reason
Looking at the weekly chart above, the currency pair enjoyed a bullish trend since March 09.
Momentum is good and the lower trendline has not been tested for sometime.
2) Fundamental Reason
With the record deficit for the US, confidence in the US Dollar may be affected.
Let’s put this in a simple way. If a food voucher company has a huge amount of debts, will you have confidence in the food vouchers it issues?
With record high unemployment rates and apparent slow recovery, this seems to add on to the case that the US dollar needs a rest for now.
When it comes to interest rate, the US dollar carries a tag of 0.25%
We all know where the big money goes. The higher yielding currency.
3) Geekamental™ Reason
You folks know me. I like to always apply a relationship equation to my views.
Look at how the various folks spoke in defense of the US Dollar. How about the good economic data of US being released so far?
These have only delayed the weakening of the US dollar as apparently seen with this bullish trend.
The momentum indeed seems strong.
Furthermore, S&P 500 has soar high up above together with gold. Oil, although not as spectacular as the other two, had come a long way from the depths of $30+.
Lastly, risk aversion seems to be disappearing, at least towards the US dollar.
The previous NFP saw bad results but caused a weakening of the US Dollar instead of the previous trend of strengthening it.
This seems to suggest that the “real” fundamental days are back whereby a bad economic results of a country usually weakens it’s currency.
At the end of the day, as with the forex market, things may change anytime and hence whether you are a bull or a bear, employ proper money management and should you make a mistake, learn from it and become a better trader!
I am going for a BBQ session now! However to be honest, i rather be at home reading articles.
I am a Geekcoholic =)
P/S i may not be doing a bear article but regardless, if you have reasons on why the US dollar will strengthen instead, find me at the forums. Would love to hear and learn from you.
You can visit my blog for more EUR/USD and forex articles.
Discuss with me over at forums.fxinstructor.com!