Thursday, October 3, 2013

The Euro is nicely on the rise

 While it may seem on occasion that there are so-called currency wars between nations, the truth of the matter is that the developed world more often sees total cooperation between the various jurisdictions and the central banks within them.

Thus, the US and the Euro zone can collaborate in order to assist in the weakening of the Japanese Yen when they are called upon to do so by the government of Mr. Abe. No doubt the favour will be returned in due course.

In Europe, for some reason or another at the present time, a stronger Euro seems to be the desired outcome. Mario Draghi, at his press conference earlier in the week, certainly gave the impression that he and his colleagues in the European Central Bank (ECB) were not in any way put out by the current rise in that unit. The USA, by default, is helping here by virtue of the government shutdown and the inability of Congress to agree on the most basic measures to avoid embarrassment.

Technically, the Euro / US dollar pair (EURUSD) is in a pronounced upward trend. Higher highs and higher lows on the 4 hour chart testify to this (see above). There is resistance in the near horizon in but if price clears that the way is open for further significant appreciation.