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Originally Posted by bearprofits
I don't see any reason why the dollar will not continue to fall, Euro 1.70 is a definite possibility, but it will not go there directly. I imagine there's many more disappointing facts to be uncovered in the current credit debacle, much like what we saw coming out of Bear Stearns last week.
But the Euro sector is not without their problems, mainly internal politics. What goes up must come down, but there's still many hills and valleys to trade till then. But the trend at the moment is up, so any south trades should be viewed as corrective in nature.
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Bigger picture bear, you need to look at the bigger fundamental picture. You also need to take into consideration what has already been priced in and where dollar weakness starts to become a problem for the
real powers in this market, the central banks. As I mentioned in another thread, central banks will not allow a dollar freefall or for speculators to dictate the prosperity or otherwise of the world's economies. They tolerate these speculative moves but that is all, there is a limit to what they will expose their respective economies to and once that limit is reached make no mistake they will act in concert. There's talk of a line in the sand at 80 on Usd/Jpy and the ECB has intimated levels much above 160 on Eur/Usd would be uncomfortable. Once they make those levels absolutely clear then the market tends to respect them (or fear them!). I don't know if you were around for the BOJ intervention a few years ago but that was a good example, once the jawboning stopped and they had issued a shot across the bows it was every man for himself who dared to short dollar/yen!
We've had a good run but it can't last forever.
If I remember correctly you were in the 'definitely won't break 1.30' camp not so long ago weren't you
