Forex

The Road to Zimbabwe

By Terry Coxon, Editor, The Casey Report

Sprinkled among all the official talk about efforts to end the current recession, you’ll hear assurances, notably from Federal Reserve Chairman Ben Bernanke, that when the economy does revive, it won’t be allowed to blast off into runaway inflation. The Fed, we’re being promised, will prevent such a launch by reabsorbing the hundreds of billions of dollars of excess liquidity it recently created to halt the credit crisis.

After months of being dragged in the dirt, having sand kicked in its face and being slapped around by the global community like the proverbial red-headed step child, the once mighty U.S. dollar finally flexed its muscles during the first full trading week of August.

I've got crude oil on the brain. But I'm not alone. Basically every asset market in the world keeps looking over their shoulder to see what's going on with the price of "black gold." The most powerful economy on the planet now shudders audibly when crude oil prices rally. You know things have gotten out of whack when the people who sell crude oil are trying to talk down prices!

As I write this FX column, the Open Championship for golf is underway in merry old England. It's mid-July, and spectators are huddled like sheep into the hills, trying to avoid snarling winds, sideways rain and brutal conditions. Is it any wonder that the Brits became one of the greatest sailing forces on the planet? Who wouldn't want to escape that dreary island and see some of the world? I just pity the British citizens who drew the short straw and didn't relocate to the Caribbean. And how about sending your prisoners to Australia ' who says crime doesn't pay off!

we're going to delve hard and fast into the world of technical analysis as a directional trading key for trends in the euro/dollar FX market. Let's make this clear right off the bat:

Brazil is actually the fifth largest country in the world by population and is by far the largest Portuguese-speaking nation on the globe (sorry, Portugal).

he Australian economy has enjoyed 16 years of expansion, they make a bunch of decent beers, they have a higher standard of living than any G7 country outside of the United States and they have the 7th largest coastline of any country on the planet.

Federal Reserve Chairman Ben Bernanke is arguably the most watched figure in the world from a financial perspective.the Fed rarely makes direct comments about the foreign exchange market, typically leaving those kinds of policy stances up to the Treasury Department.

technical analysis as a directional trading key for trends in the euro/dollar FX market.

sticker shock at the gasoline pump threatens to cripple economic recovery in the United States

When is good news really bad news? When the market refuses to catch the ball on the good news and run. That's what happened Thursday when Eurozone economic data came in better-than-expected.

Currency markets tend to be wonderful trending instruments, and the relentless upside charge in euro/yen has been on a seven-year run that rivals the dramatic decline in the U.S. dollar against the euro FX standard.

The euro/dollar pair is overbought on long-term charts and appears to be entering either a correction, or an outright downturn given the current pattern.

If you're curious how to get involved in FX and what trades might be attractive, then you've come to the right place.

More than 14,000 investors gathered last week at the World Money Show, where the focus was on international investing.