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David White
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David White is a software/firmware/marketing professional and a long time investor. He has worked in the networking field, the semiconductor equipment field, the mainframe computer field, and the pharmaceutical/scientific instrumentation field. He has bachelor's degrees in bioresource sciences... More
  • The Short Term Euro Direction Seems To Have Changed To Upward 4 comments
    Apr 12, 2010 6:26 AM | about stocks: FXE
    The EU has very slowly and painfully been coming to a resolution about the Greece debt problems. This weekend they agreed on a more concrete bailout package. They will float loans to Greece for up to 30M Euros at 5%. The IMF will provide another 15M Euros of loans at 5%. The Greek CDS spread rates are already down considerably in reaction to this news. This bodes well for the near term performance of the Euro. The FXE chart below indicates that a short term upward trending bottom may have been reached.



    This could be the start of a bigger turn, although some economic indicators argue against that. Still it seems likely to be at least a short term move up of the FXE to the $137.50 level. The FXE is just passing through its 20-day moving average, and its 50-day moving average seems likely to be penetrated to the upside soon. We will all have to wait for further developments to try to predict much more. Pundits as famous as Jim Rogers and George Soros are saying the FXB should go down longer term (it has been rising recently). This likely means the Euro will go down in sympathy. I wouldn't care to argue with them without a lot more evidence to go on.

    Good luck trading.


    Disclosure: no postions at this time
    Stocks: FXE
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This post has 4 comments:

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  •  
    I didn't mena to leave out all of the other PIIGS problems as a reason that the Euro may still have some longer term down side.
    12 Apr 2010, 03:49 PM Reply Like
  •  
    My Euro comment is here:
    spaculator.wordpress.c.../
    13 Apr 2010, 07:42 PM Reply Like
  •  
    The eruption of the Icelandic volcano may have put a huge dent in this trade. The volcanic ash has turned Northern Europe into a no fly zone. If it perists, it will have a significant impact on tourism. It will have both health and clean up issues. Even if the damage was only emotional, this event could make the FXE trend downward.

    It is likely best to abandon any thoughts of an upswing until we see how this situation sorts itself out. I would abandon this trade for the moment.
    16 Apr 2010, 03:27 AM Reply Like
  •  
    I think that is the truth of your words.
    I suppose those who like to risk can place buy long EUR/USD order at 1.3685 and wait.
    But the strong likelihood is that the euro will go downtrend.
    16 Apr 2010, 06:16 AM Reply Like
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