They short-term picture of the EURTRY shows the need for a little pullpack to the gap area at 1.78 before the main trend can pick up again and challenge the 1.85 resistance in about 2 weeks and break out to the upside. The currency will move in sync with global markets moving mostly. Hence, positive stockmarkets globally let the EURTRY drop and vise versa. Soon we might get an intrinsic momentum as well, since the scandal factor around the current government is rising and harming their reputation. Since the new commanding General took over in August, a basic change in the attitude has been noticable. Since we expect the US markets to drop roughly another 10% from current levels, we can expect a parallel move for a rise in the EURTRY. From a pure technical point of view, it has potential up to 2.33, but we should see the high again above 2.10 as an easy target. Hence, buying drops below 1.80 is the way to trade with a time frame of 4-5 months the negative carry will cost around 4% for 4 months, which makes this trade always difficult but this time you still can gain net of 6% with upside potential. Other trades varrying a similar risk will earn better returns like shorting the XU100.
Thursday, September 25, 2008
EURTRY technical update
They short-term picture of the EURTRY shows the need for a little pullpack to the gap area at 1.78 before the main trend can pick up again and challenge the 1.85 resistance in about 2 weeks and break out to the upside. The currency will move in sync with global markets moving mostly. Hence, positive stockmarkets globally let the EURTRY drop and vise versa. Soon we might get an intrinsic momentum as well, since the scandal factor around the current government is rising and harming their reputation. Since the new commanding General took over in August, a basic change in the attitude has been noticable. Since we expect the US markets to drop roughly another 10% from current levels, we can expect a parallel move for a rise in the EURTRY. From a pure technical point of view, it has potential up to 2.33, but we should see the high again above 2.10 as an easy target. Hence, buying drops below 1.80 is the way to trade with a time frame of 4-5 months the negative carry will cost around 4% for 4 months, which makes this trade always difficult but this time you still can gain net of 6% with upside potential. Other trades varrying a similar risk will earn better returns like shorting the XU100.
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