I wrote yesterday that EUR/USD will be heading towards parity by the end of the year. I base that on my assessment of where the economy and stocks are going-down. With the euro heading lower, expect to see the same happen to the pound and Australian dollar as well.
On Friday, we get the June Non-Farm Payrolls report, which is expected to show a loss of about 200,000 as the government lets go of temporary census workers. However, the real number that the market will be watching will be private payrolls, which is expected to show a gain of around 100,000.
If that number disappointments, the move towards parity for the euro will begin in earnest as stocks trend down. But even if the number is better than expected, I still believe the economy will weaken going forward, which means the decline to parity will only be delayed.
I’ve included charts on EUR/USD, GBP/USD and AUD/USD on which I’ve placed fibonacci lines which will give you clear entry and exit points.
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