EUR/USD forecast 04.08.2011

EUR falls from the beginning of the today's trade. We are very close to the tip of the legendary Daily triangle, once again managed yesterday to break out of it, but there is still uncomfortable. So now we are again in the small piece left of it, just tested its downside border @ 1.4280. EUR has no clear direction and if the price returns above 1.4320 there will be formed something like a flag formation on H4 which will suppose further gains. Today is the ECB rate decision and mr.Trichet speech @ 12:30 GMT. Lets take a quick look at the situation in Europe - Italy has some serious debt problems, spendings are 120% of the GDP and Brelusconi's government may not succeed to make the necessary cuts. Italian economy is the third largest in the EU and is twice bigger than Greece, Portugal and Ireland combined. Any problem with the Italian economy can destroy the whole eurozone and EUR will be dead currency. Spain has the biggest unemployment in the EU - it's almost 21%, that means every 5th person is unemployed, and there are also economy problems. But ECB says everything is OK, EUR can trust - it's only dust in the eyes - eurozone is going to be doomed - it's only a matter of time.

Overseas USA avoided default, still bad data, still high unemployment, but we see these from long time, and nothing new. Now they are speculating with the possibility of QE3 which makes the dollar fall across the board, but we shall see what will happen maybe just next week.

Today we can se an SNB intervention, so i prefer not to trade in such conditions. If you can do not trade today. For these who want to trade, enter LONG on EUR above 1.4270, first target 1.4360, second 1.44, and finally 1.4440. On the downside - enter Short below 1.42 - first target 1.4160, second 1.4130, below thing will go interesting, but let's see what will happen today.

GOLD is back to the upside after the yesterday's afternoon stand by, I expect it to make a new high today.

Tags: EUR/USD

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Comment by sabbir on August 4, 2011 at 5:47am: dont you think euro will eventually collapse today ?

Comment by sabbir on August 4, 2011 at 5:50am: daily chart

Comment by Bruno on August 4, 2011 at 6:31am: Hi,

Indeed I have 1.4440 as a v. tough level (H4) to crack (in addition to daily UTL @ 1.4363. Still, I would not dismiss an overshoot @.4470 but I'll close all my longs if we reach the 1.444 area.

My main target still remain @ 1.4080 at the moment (SNB are not helping Euro, they are buying Gold. It just happens that this has a positive effect on Euro atm so this move up is not really supported)

Regarding Gold and Silver, how high do you think they may go before correction?

Comment by Vladimir Mihaylov on August 4, 2011 at 6:40am: If we break successfully 1.4240 we may go some 100 pips down, remember that we have opened the day @ 1.4340, so if we eventually go to 1.4140, there will be some 60-80 pips pullback to 1.4200-1.4220 again. Upside break possible only on H4 close above 1.4360.

Both GOLD and SILVER wil go up, SIVER even more i think. GOLD formed a clear flag formation on H4.

Comment by Vladimir Mihaylov on August 4, 2011 at 7:19am: It is expected mr.Trichet to say that ECB bond buying program will start again. This will support the EUR rise. After heavy sell pressure during Asian session and testing of 1.4270 EUR rebounded is going to 1.42 once more before rise again to 1.44 this afternoon. Seems that the news about Italy don't worry anyone, interesting, i wonder how long this will last. Spain tests the market with another bond auction today.

Comment by MarlonF on August 4, 2011 at 7:29am: what are the targets for gold and silver? 1700 for gold?

Comment by sabbir on August 4, 2011 at 7:44am: in my opinion, gold will go up today very close to recent high and hold, friday will be profit booking day and gold should drop. no chart or theory, just an instinct.

Comment by MarlonF on August 4, 2011 at 8:14am: i dont think it has any intentions of dropping.. and interest rate decisions and conferences are gonna likely create volatility and atleast temporarily it will break its highs... whats your view Vladimir?

Comment by Bassam A. Muhammad on August 4, 2011 at 8:29am: in my view , EUR and GBP was intending to rise as your initial forcast to buy the eur at 1.43 but the intervention of BOJ, heavily affecting USD , it delayed the move a while, so after the momentum is over EUR will rise again and USDJPY will slide slowly again

did you close your 1.43 BUY order ?