EURO vs USD

[admiral]

Originally Posted by J. Abizeid

Thank you admiral,
I like your charts. They certainly make sense but only for short term investors.
I think smart long term investors know real well buying dollars for short term gain is risky business. I always felt the safest way is to secure at least 50% of your investment in something other than dollar including gold and, day trade the rest or save it in a high yield interest bearing LL savings account.
I still believe the LL is safer than the dollar. The reason is, not only you get higher interest return on it but the central bank, soon will become under pressure to boost its value possibly to 1.300LL to the dollar in order to compensate for the inflation in Lebanon caused by the melting dollar; the gas prices for an example. Oil rebounds as dollar weakens - Yahoo! Finance=
Once again, the fundamentals of the US economy have not change and its present administration is more honest than the previous one. They no longer trying to fake it and the next G20 summit will show just that.

I believe it is crucial to be flexible in currency investment and to go with the trend , this is why short term investment is safer than long term investment in the currency market , we are talking in this thread about currencies , of course in other types of investment , long term might be more safe .


as for your view for investment portifolio , i believe the best kind of long term investment in lebanon is : Land as first option , and appartment as a second option , i dont trust gold too much it is very volatile .

[J. Abizeid]

Originally Posted by admiral

I believe it is crucial to be flexible in currency investment and to go with the trend , this is why short term investment is safer than long term investment in the currency market , we are talking in this thread about currencies , of course in other types of investment , long term might be more safe .


as for your view for investment portifolio , i believe the best kind of long term investment in lebanon is : Land as first option , and appartment as a second option , i dont trust gold too much it is very volatile .

A agree with you as far as real-estate investment in Lebanon is a good choice simply because of the dollar meltdown.
Those who trusted the dollar illusion lost about 18% of their portfolio value during the last six months. They can lose up to 30% this year alone if they don’t make a move. And one of the good moves is buying a luxury apartment in Lebanon which will appreciate because of such demand. The only problem is the real-estate value in Lebanon is a typical bubble and it becomes almost impossible to make a quick sale when you suspect the bubble is about to burst.

[Venom]

Originally Posted by J. Abizeid

The dollar game has not been a fair one due to manipulations mainly by China and Japan but things are changing now.
Remember it’s the US dollar game vs. the rest of the world currencies not just the euro.
Some believe when dooms day comes, the US stock crashes, the dollar follows and gold shoots up way above $2.000.
For now, the correlation between economies and their currencies is real but the behavior between a real producing economy like Germany and China is opposite to the phony US economy that is based on consumption and printing paper dollars to support it.
The fundamentals have not changed a bit in the US economy. They are trying to re inflate a bubble that has so many holes in it by printing and pumping more fake dollars into it. Every time you see signs of life in that bubble, it’s caused by inflation not healthy economy. I other words more dollars for less value.

BTW, Happy Eid Fitr to you and all!

the daily correlation between Euro and Dow for example is close to zero, almost a negative correlation

[J. Abizeid]

Charts can be misleading and designed in a manner to show whatever pleases the eye.
I’ve been tracking the market for a long time on daily basis. It’s easy to be tricked because of intentional manipulations and misinformation but if we are convinced about the fundamentals of the economy we will not panic and sell or buy when they want us to do so.
Sometimes there is a lag in the market reaction but overall I managed to protect my investments using long term strategy and controlling my greed.
Let’s make it simple and take today for example: As of now:
The DOW is moving up with some time lag.
Dow9,753.99+11.79+0.12%


The euro is moving up
EUR/USD1.4656+ 0.0072

Oil is moving up
Oil69.69+2.98+4.47%



That’s basically the bottom line unless the stock market crashes. At that time all bets are off.

[J. Abizeid]

Originally Posted by J. Abizeid

That’s basically the bottom line unless the stock market crashes. At that time all bets are off.

Dow9,583.35-128.93-1.33%
EUR/USD1.4537-0.0101
Oil69.47-1.14-1.61%

Today is another example: Stock market Down, Oil Down, dollar UP.
In other words, if you’re in the US/ dollar market, you can’t win because ones gain is neutralized buy the other’s loss.
That’s the point I’ve been trying to make.
On the other hand, when Europe’s economy is good, their stock and their euro in general go up simultaneously. That’s an honest deal.
And the reason is, the US economy is measured by the amount of printing or borrowing money for consumption. As far as Old Europe (Germany and France, Europe’s main engines) and Asia, we already know they are moving out of recession which is real good news for their investors.
Another advantage for Europe is when oil goes up, the euro goes up which makes it less painful on them unlike the US and Lebanon that pegs the LL to the dollar. You know how the Lebanese motorists start screaming when gas prices go up. That is why I suggested that the LL should be pegged partially or in full to the euro.

[admiral]

As expected the euro faced a heavy resistance near the 1.50 area , however what surprised me is that long euro traders didnt even try to test the strength of the 1.50 psycholgical level and they backed up near the 1.48 area.

The big players are still long on EURO , the ones who sold at 1.48 are mainly medium to low level investors , the big players will start selling some of their long euro positions if the 1.44 -1.45 area is breached to the downside ( long term trendline as shown on the chart and 50 % fibonnaci level retracement).

It is very crucial for the euro to stay above 1.44-1.45 level to sustain its short term up trend strength momentum , however even if this level is breached it doesnt put the uptrend long term perspective of the EURO in danger and can still gather momentum in the 1.40 area to try another up move , the whole picture will change if it goes below the 1.38 area




I am attaching a chart for USD index ( USD Index measures the performance of the US Dollar against a basket of 9 major currencies) on the chart we can see that the USD is nearing the long term down tendline and might breach it to the upside , tomorrow might be an important day to watch what will happen in this pair.

[J. Abizeid]

Thank you Admiral, nice work.
Let’s see what the Oil and the DOW do tomorrow.

[J. Abizeid]

Originally Posted by J. Abizeid

Thank you Admiral, nice work.
Let’s see what the Oil and the DOW do tomorrow.

Dow9,582.21+94.54+1.00%
EUR/USD1.4657+ 0.0080
Oil70.45+0.50+0.71%

[J. Abizeid]

Originally Posted by J. Abizeid

It’s not about the bad economic news as much as who’s printing more paper money for stimulus without backing it up.

Dollar Living on Its Reputation and Borrowed Time
Dollar Living on Its Reputation and Borrowed Time: Tech Ticker, Yahoo! Finance=

Gulf Arab states, along with China, Russia, Japan and France are planning to stop using the dollar http://www.marketwatch.com/story/off...ice-2009-10-06as the oil benchmark, according to an exclusive report published in the U.K. by The Independent

[J. Abizeid]

Dow9,909.75+44.81 +0.45%
EUR/USD1.4795 + 0.0066

Oil73.46 +1.69 +2.35%


http://www.marketwatch.com/story/dollar-slips-from-early-gains-as-equities-rally-2009-10-12
NEW YORK (MarketWatch) -- The dollar lost ground against major rivals on Monday as U.S. equities extended a rally ahead of a heavy flow of corporate earnings this week.