By Greg Holden – The question posed in the title of this article shouldn’t sound impossible. It shouldn’t even sound far-fetched. Look at the chart below, what do you see? The trend of this pair has been obvious since December 2009. Why are we to think that this pair couldn’t reach 1.2000, or even lower?
Let’s do the math.
First, the US economy is in fact improving. Consumer confidence is up. The housing market is up. Manufacturing and construction are up. Even employment looks to be making gains, however minor they may be.
Additionally, this week’s news has only scared the life out of investors who were once interested in riskier assets. We’ve seen a massive migration of investment away from risky assets like stocks and high-risk currencies (EUR, AUD, NZD). The money pulled out of these assets was almost exclusively moved into 2 others: the USD and Gold – both of which are primary safe-havens.
After yesterday’s Wall Street debacle, there is a high possibility that today’s Non-Farm Payroll (NFP) data will help to recover some of the losses seen in the stock market, but yesterday’s events do not bear good tidings for market confidence. As a result, we’ll likely see a rising USD (a sinking EUR/USD) as a result of the NFP report, regardless of its outcome. Stocks may rise, but the EUR/USD seems destined for 1.2000, by my calculations.
If ever there was a good time to invest in forex and get in on this USD growth, now is that time.
EUR/USD – Daily Chart
Forex Market Analysis provided by Forex Yard.
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