It has been quite a while since I have not written any longer about my forex adventures. This does not mean that I did not followed up on how the currency pairs moved, just that I was a bit absorbed with other blogs…
lately I abandoned a bit my trading with the GBP/JPY pair and focused rather on the EUR/USD currency wildhorse. And it has been quite a ride, EURUSD jumped up and down between the resistance levels at 1.2 and 1.4. The overall trend in the last 6 months was of a steady growth, due to the increased perceived weakness of the USD. Not that the Euro was still – some good news from the Euro area economy have pumped a bit its currency in relationship with other counterparts. Most notably, Euro gained a lot in relationship with the GBP, where the massive budgetary deficit and the following cuts have taken a serious toll on the English economy.
Lately Euro has been even more bullish. Last weeks it has broken the historical resistance level at 1.4. Of course, everybody wonders where it is going and nobody really has a clue. This continuous depreciation of the dollar is a bit scary, since it started in 2000 (with the Euro launch) and went the same direction for 10 yeras by now – slowly downwards. It is of course also about the different currency politics of USA and EU – USA has traditionally financed its economic cycles and exports via the currency devaluation, whilst EU has been somehow protectionist in this respect. We here at doitinvest.com think that now the things are a bit over the cliff and I think the US government and the Federal Reserve will limit a bit the quantitative easing efforts, since things turned out bad for US. This is just a speculation and I think that the trend of teh EURUSD pair is going to reverse over the short term. For the long term? Noone knows…