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Friday, October 1, 2010

EURTRY update

The EURTRY is in a complicated pattern but has broken above a triangle pattern heading for 2.05. It will be an uphill battle though as the EURUSD is about to top out medium term in the 1.38-40 region and make a severe correction after a 20 cent rally we can expect a minimum 5 cent up to 8 cent correction which will basically undermine a EURTRY advance on the other hand TRY always weakens than global stockmarkets do which is about to start within a few days and the frontrunner could be the Turkish stock market which has made an insane rally beyond any means as the referendum was one and the last quarter of GDP was announced to be growing around 10%. Well with real inflation of at least 20 % for Turkey no growth at all would be around to brag about but as Turkey has one of the deepest negative interest rates of around 12 % it is really amazing how this overvalued currency stays at this overpriced levels. ON the other hand as deception and manipulation has become the new global game in financial markets Turkey is a perfect place to play a fierce game. Coming back to the currency where are easier bets to make in currencies as betting against the TRY still carries negative carry and we are locked into a trading range of 1.95 - 2.05 for the next weeks. Rather short the EURUSD above 1.38 since no carry costs and take away the 5 cent.

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