The pair from a technical point of view is similar to is currently not blocked to a space of massive resistance. Level 1.42500 violently this currency downward mode in the last pair is approached at the end of October last year. We test this area, technically this diagram below as we are going along which is obviously a very optimistic pattern. It seems that the tendency to decline is about to be tested at the 1.45500 level as a line of trend of everything at the top of the market in 2008 connects to another high in November 2009 coincide with where the 1.42500 level now.
Thus, the response to the direction of the pair will likely be answered in the beginning of the second quarter. It is noted that there are many reasons on the fundamental side which could propel this couple in one direction or another in March and April.
The Portuguese issue has not gone away, and it seems that a rescue plan is pretty much imminent. This raises the question where are not some other savings difficulties will be felt the need to pay their debts. He thinks this way: If you run a country like the Spain, why you would be bored pay your debt when the Portugal is not? This is the kind of situation that Europeans find as debt problems and Portugal, Italy, Ireland, the Greece and the Spain are still there even if regulatory agencies have chosen to ignore.
At the same time the fed, the United States is currently printing dollars as much as he can possibly manage. It is now a common joke in some Chambers of commerce which explains the best way to make a buck these days? Sell ink. As QE2 winds down in in June, the question will be or the Federal Reserve chose to extend to a third Act, or if they will leave the relaxation process. If they go out, it will be very positive for the dollar and propel the couple to the downside.
At this time forecasts for QE2 almost have to be purely technical, as many of these questions is not answered at this time. It seems that one of the best indicators of what direction we're going will be a weekly close above 1.42500, or a weekly very narrow below 1.40000 which would make this pair look low. It is noted that the analysis of the peaks and troughs suggests that we are going to the top. However, we have major technical levels to break in the process. Keep an eye on this trend line, and you will know which direction to go.
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