THE DOT - if this turns orange or red be alert

Thursday, December 17, 2009

EUR update

The EUR weekly chart shows that a trading channel has been established which is basically confirmed by a rare phenomen that the 50and 200 MA's are moving alongside. For now the move might be limited to 1.42 but within 6 months we should test the lower end of the band around 1.30. Such an event will be the exact reason for my still valid retest of the 1.60 level thereafter as the governments will have to put the printing machines into higher gear and throw the new money at the real economy with new stimulus packages ( as they did in Japan). The problem of the Euro is as ı had stated many times it has no real value against the Dollar as the so called PIIGS are just one part of the problem. Germany is run by one of the weakest administrations in decades and has not done any structural changes to make Europe a more competitive place and the ever disturbing stepbrother GB has proven it can not do any better with the legacy of Tony Blair. Europe is running in a structural collapse with its aging population and bankrupt social care system and even more so China will be a big competition going forward as China will scale up in technology and sell cars and planes and machinery to other countries soon taking away the thunder from exporting nation Germany. As china is now the biggest car nation in the world the information transfer will obviously speed up so its only a matter of time.

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