A fresh round of risk aversion is sweeping the market with EUR/USD slumping to fresh low at 1.3618.
Oil has fallen another dollar and now trades at $70.92, and gold trades just above $1050.
I assume there are 1.3600 barriers in EUR/USD but I can’t swear to it.
13 Responses to “Here we go again”
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AUTOREFRESH 
wow the ecb really doesnt get it…stark is nuts!!! things have stabilised why planet is he living on???
It this correct? My calculation has the next target 1.3480…using the fib. Could break up, then that target is 1.3800.
Wow this is more or less unreal
Planet Buba, where rates are 5% with a bias to tighten
lol jamie this guy is brain dead hes toast…wow the eu and ecb are really arogant to think they can wish this all away…sounds l;ike there stuck in the alice in wonderland syndrome..just keep apping those shoes together..lololol
Jamie you’ve mentioned how the euro has had this coming, how the USD got bashed all 2009 – etc. Question: If you look at the eur/usd monthly – the general movement is, USD weakness always gradual & consistent, but any USD strength VERY sharp. There’s no consistent USD strength over the last 10 years, except for a small portion from Jan 2005 to June 05 when it dropped from 1.36 to 1.19 (only 6 months). The only consistent longterm USD strength was from 1995 to 2000. Your take on this? I’m talking long term here not short term.
I think it dovetails with the rise of China. As China played an ever bigger role in global trade, the dollar fell as they diversified reserves. Until the imbalances correct and China allows the currency to freely float, a long-term downtrend for the dollar is likely. But as you note, the corrections are brutal…
Another macro factor was the Patriot Act which made it unattractive for shady actors to ark funds in the US…those monies ended up in EUR, as did a percentage of other nefarious activities like the global drug trade…Lots of forces out there we don’t think about every day…
BTW, if you zoom out the EUR/USD monthly – I’m seeing 3575 as some major support
China… wow yea that does make a lot of sense. Thanks.
Hey Stephen, Greenspan’s book “The Age of Turbulence” details how the Bush/Greenspan response to the aftermath of the stock market crash and the 9/11 bombings was to devalue the dollar so as to avoid a depression. As for the dollar strength of 95-00, imo that was due to a recognition of America rising from the recession/deficit/market crash/s&l crisis of the late80s/early 90s thanks to the pc, software, internet boom. If and when Friedman/Obama’s vision of the greentech revolution (or some sort of job machine/bubble) comes to pass, with america pioneering new and important technology that becomes a global standard, then we’ll see real (and not just relative) dollar strength again. It’s all about growing jobs and the economy. Of course, democrats want to do so through spending and republicans want to do so through tax cuts. And dems don’t trust big business with the tax cuts and republicans don’t trust government with the spending. Clearly, leadership isn’t going to come from Washington- some new Bill Gates types are going to have to make some moves.
Further to JR’s post, there was also a great deal of nervousness in the early days of the euro..some of the jitters then are the same today…and in 1993 and 1988.. and…
as for “here we go again”… if we gap down yet again sunday night/monday morning, the question this time is will it be a runaway gap that doesn’t get filled… it’s been an easy play to fade that gap the past couple of weeks but that’ll be a tougher call this week. here’s to hoping we get some sort of a playable bounce this afternoon…
Nah, gonna go and play with summat else now.
It is Friday after all