EUR/USD Pushing 1.40

Since the the government effectively nationalize the GSEs, Chinese and Russian stopped their dumping of Fannie Freddie papers for now. At least, that’s what I heard.

The other macro going for USD haven’t changed:

  • Weak Euro Zone economic data.
  • ECB and British Central Bank’s next move is expected to be a rate cut.
  • US Fed is expected to hike rate next.
  • USD based asset is becoming more attractive.
  • Sovereign wealth funds dumping USD seems to be slowing or stopping.
  • US investors are moving their money back home.
Still loving my EUR/USD short position. 1.40 is a big psychological barrier, but I have a feeling the defenders of the 1.40 barrier (exotic option traders) will be overrun by real money heading home from foreign investments. Trade with the real money.

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