Profitsee – Future Economic Surivival

Divinations in Forex, Commodities and Economic Patterns

(MELL) EUR/USD outlook

MELL – The market doesn’t really know what to make of EUR-USD at the present time. With much of yesterday’s angst emanating from concerns about the sub-prime mortgage market in the US, there is the inevitable suspicion that EUR-USD should rise. However, there are two reasons why this should not necessarily be the case. First of all, the market is already long of EUR-USD according to IMM positioning and such positions could easily be liquidated in an environment where risk appetites in general are being reined in. Second, if money is taken out of markets globally, much of it will flow back in to the USD investor base and this will be USD supportive. On this reasoning, there is some degree of downside risk for EUR-USD.

©2007, Mellon Financial Corporation Note: Although obtained from sources believed by us to be reliable, Mellon Financial Corporation and its affiliates cannot guarantee theaccuracy or completeness of the information upon which this report is based. This report does not purport to disclose the risks or benefits of entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.

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Filed under: EUR/USD

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