EUR- Going for  a Squeeze

EUR- Going for a Squeeze

Everyone thinks that EUR/USD is going to parity -- and it may well end up there eventually-but in the meantime -- it may hurt a lot of complacent shorts as it starts to squeeze through the 1.1000 level. There are a couple of reasons for why the euro may start to appreciate.

1. Greece -- while the problem is hardly solved. It’s been shelved taking the downside pressure away.
2. Lower Oil -- is very stimulative for the EZ economy where energy costs are higher than the US. That along with easy credit from ECB should help EZ economy grow
3. Delay of rate hike to December -- although US labor continues to be impressive the Fed does not appear to be in a rush to hike and the longer it delays the stronger the euro gets.

Tomorrow’s Flash EZ PMI data could give us a clue as to the conditions on the ground and if the data continues to print above the 50 boom/bust line it could send the euro towards the 1.1100 level.

2009 eurusd forecasts Chart Of The Day

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