EUR-USD heading for USD1.70

Looking at the chart its apparent that the EUR-USD is going to USD1.70, at which point it will do a double bottom. I would then expect it to return back to its normal trading trade. The technical reasons for this are the strong symmetry evident in the chart. The USD has a 'parityband' between USD1.20-1.35 and has traded within 35c of that band. I am sure the market will be looking to retain that symmetry. So the EUR-USD will be a good 'short' trade from 1.70, though based on prior history, we can expect a 'double top', just as it previously made a 'double bottom' in 2001-2.
In terms of fundamentals, I would expect the Eurozone to welcome the strong EUR as a way of stimulating or supporting US exports in the short term. They might even appreciate the 'lost competitiveness' as a means of driving economic reforms in the EU. The time period is quite long, but we can expect the US election to have reached a result by the time we see the 'double top', then we can expect a recovery in the USD, initially motivated by expectations of rising interest rates in the US, but later also the prospect of greater taxes on the rich. I also believe the US under Obama will adopt a tax on energy, and likely that will subsidise health and alternative energy programs.

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Andrew Sheldon www.sheldonthinks.com