As Szabi mentioned overnight (sorry for not getting back to you sooner) , I was very bullish some months ago when EUR/USD was at 1.31 and I fancied it to move to 1.47/1.50. I think such a move is still possible but the one major factor missing at the moment to my mind, is momentum. The big option plays have sucked the lifeblood out of the pair and I would expect EUR/USD to have more drive before it can challenge the 1.47 highs or a psychologically important level like 1.50. That’s why I think EUR/USD will remain in a broad 1.37/1.43 consolidative range before it starts to mount a serious move in one direction or another.
I will also add that the US have done much to deal with the structural problems in their financial markets whereas Europe lacks strong decisive leadership and still faces some potentially crippling problems. I think the next big shock to the financial markets will emanate from Europe and when this happens, EUR/USD will fall really sharply. Therefore, with a major top now in place at 1.60, my macro strategy would be to get short as we near that level again. Whether that is 1.48 or 1.55, I don’t know. EUR/USD launched on January 4th 1999 at 1.1760ish I seem to remember. It fell to .82, rallied to 1.60, and the truth is somewhere in the middle of those two extremes. While I saw a possibility to make a quick 10 big figures some months ago, I think the next 10 will be much harder work and I want to avoid getting bullish near the top.
