Top Forex News
This are the top long term fundamental news I am following today.It’s always interesting to see how fundamental traders can give two totally opposite views on market direction but woe unto the trader who doesn’t make an effort to at least follow some of these predictions especially if one is trading long term.
Technical Analysts Predict end of Euro Bull
According to some technical analysts ,the euro’s record setting run may not extend until the end of october.
The euro’s appreciation is putting pressure on the European Central Bank to find a way to curb the gains.
The currency may drop as low as $1.367 by the end of October, according to Citigroup and Zurich-based UBS AG, the biggest currency traders after Frankfurt-based Deutsche Bank AG. A Bloomberg survey of 45 banks and brokerages set the euro at $1.40 by January and $1.34 at the end of 2008.
The euro dropped 3.2 percent in the five weeks following the last time the index passed 80 in December 2006. It fell 3 percent in the seven weeks after the index exceeded 70 in the last half of April, and the currency tumbled 3.5 percent in the three weeks after it topped 75 in late July.
“Most technical indicators — stochastic, momentum or relative strength — are telling us the euro is extremely overbought,” said George Davis, chief technical analyst at RBC Capital Markets in Toronto. “The prospect for a short-term correction is getting bigger every day the rally is sustained.”
Carry Trade is Back
The carry trade seems to be back is favour with rising share prices in Asia making the yen look weak again.
In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the borrowing and lending rate. The risk is that currency moves erase those profits. More on this story
I am not normally inclined to follow fundamental analysts but JP Morgan is
the dollar will fall to 112 yen at the end of this year, compared with a previous forecast of 116 yen. Against the euro, the dollar will drop to $1.45, weaker than an earlier forecast of $1.40
Good luck trading everyone this week and keep the above information somewhere in your head especially if you are trading long term.
[...] yesterday’s top currency news, we discussed how major banks can see the yen carry trade coming [...]
[...] d.mecklenburg@verizon.net (Derek Frey) wrote an interesting post today on Top Forex NewsHere’s a quick excerpt…This are the top long term fundamental news I am following today.It’s always interesting to see how fundamental traders can give two totally opposite views on market direction but woe unto the trader who doesn’t make an effort to at … [...]
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