Forex Trading systems, MT4 indicator and EA
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July 2008 - Monthly pick by Felix Homogratus |
Mid Year Update
By Rob Grespi
Greetings fellows forex traders,
It has been well over 7 months since my last
long-term outlook, I did not plan of writing anything until the end of
the year but since a lot of things have taken place the last 7 months I
felt it might not be a bad idea to write a little update.
Euro
The Euro is overvalued in relationship to the Eurozone economic fundamentals.
Mr. Trichet and his team of bean counters just do not know it yet (it actually always makes me wonder where these GUys
live), since by the time they get the economic data it will be 3 to 6
month old. But all they have to do is actually get out of their golden
tower offices and look around them.
Of course most analyst (which are more worried to
follow the consensus so that they don't sound stupid and keep there
"jobs") will disagree with me. Also most of these analyst don’t even
live in Europe.
However I live in Europe. I am sure lots of my Europeans friends can vouch for this: The Euro economy is slowing fast.
Banks are not loaning money, at least to the ones
that need it. I’m pretty sure they camp at the doorstep of Elf
Aquitaine though. These GUys, a major Euro "Oil crime cartel", never made so much money in their history.
With the price of Gas squeezing people dry, (over
1.50 euro per liter) more and more of their dispensable income is going
to Elf Aquitaine, (which has the best gauging system even better than
Exxon and the many other American "oil pigs" counterparts in general).
Get this… They buy the barrel of oil in Dollars, and retail it back in
gas to European stations in Euros. Therefore they get to pocket,
without doing anything, the 55 to 59% exchange rate differential. Not
bad hein!!! And not 1 European journalist or EU political leader says
one word about it. That should tell you where their interest lays.
In general, I see people squeezing their belts more and more and cutting down their expenses where ever they can.
The key Trigger
to look for is when Mr. Trichet will signal the start of his rate cut
cycle, only then will the Euro start a sustainable decline. To that,
just a few days ago Mr. Trichet did deliver his promised 25bp rate
hike. However, he pretty much told the "market" that's it... so now we
will see when a rate cut cycle will begin, and to be candid, I don't
have a clue.
Something important that most don't understand is that the ECB
"numero UNO" mandate is to fight inflation. And inflation we have in
Europe. The problem for Trichet is that inflation is Global this time,
and soon the chief of the ECB will be faced with the reality of a sluggish Euro economy as well.
Long term levels to look for: Offer 1.59 bow 1.60s . Bids 1.53s bow 1.50s, bow 1.43s, bow 1.35s
GU
The sound of inevitability is upon the pound. From
where I am sitting it will only be a matter of time before the pounds
falls apart, which could take it to 1.70s
The key levels to look for are Offers 2, bow 2.05 and 2.020s Bids 1.96s bow 1.93s , bow 1.80s and 1.70s
GY
The GY is benefiting from calmer financial market and the reloading of Carry trades for now.
A decisive crack of 207s, will expose 205s bow
200s, and 195/190s ( 193/192s has already been seen btw early on this
year) on the upside a decisive pop of 214s and 217s. with 230s long
term.
Gold
With offers at $1000/oz from our friend the IMF, it
is still in a bullish mode, with demand at 800 and 500. However it is
taking a breather right now, but any geopolitical excitements and the
yellow metal will rush to $1500 and 2k. Also, since the core
fundamental of all paper assets is deteriorating in the US, the gold
bullish trend is likely to remain.
On a historical view, keep this in mind. Over the
last 3 thousand years, Gold has seen the rise and fall of Empires,
regimes of all kind, leaders of all sort race breed and mental
stability along with all there respective "monkey ass currencies" of
the time. They all are gone and pretty much forgotten. Gold is still
here today. Gold will see the death of Dollar and Euro among other ****
ass paper currencies "backed by the good faith of these respective
Governments." Gold will still be present.
US economy
Well, I know I took lots of criticism back in Nov
2007, when I call for a severe recession, borderline depression.
However, in January we were in a borderline financial debacle. No we
are not in a severe recession or depression, but we are in a recession
whether the current "oil Gov" and their pom pom girls (the US media)
like it or not. The economic picture is likely to continue to
deteriorate, especially with the "lying Oil pigs" running the ship.
They can try to" violin serenade" the suffering US tax payers (Titanic
style) all they want, but the ship has taken a lot of water. and "that
captain" won't go down with the ship. He and the rest of his crooked
"oil monkeys" are more like Bruce Ismay actually.
I still believe the US economic picture, will slowly continue to deteriorate and we will see a severe recession at least.
Also keep in mind that there is another major
economic problem will have to face in the next 2 to 5 years: The social
security debacle, which is running already a major deficit and
increasing every year. But as most political leaders, which have a
foresight that look no further than the next election, they will ignore
the issue until the **** hits the fan. This problem is like a economic
nuclear bomb with a timer. But it is something I will write about
later, when I do more research.
The US real estate will continue to slowly bleed
for the next 3 to 5 years punctuated by "dead cat bounces”, which will
be celebrated every time as "the bottom" by the "pom pom girls".
That’s it folks, good luck and god bless you all.
Rob
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