Four Pillars Finance

Chinese astrology cycles for market timing

Archive for July, 2010

Outlook for Euro and Oil Prices

Posted by Danny on July 1, 2010

We are in the midst of Water months, which is the bottom period for Euro currency and Crude  Oil.

So today we will have a look at them.

Euro – US$

Since our last review of the Euro-US$ situation the Euro has continued to go down (and thus the dollar go up), exactly as our cycles indicated.
So far the Euro has found a bottom near 1.18 in early June. While we may still reach 1.16 target in July or August, I would take profits on any Euro shorts and start looking to enter a trade in the other direction.
Coming out of Water months we have good chances to see a rebound in Euro in the coming months. I would put the upside target near 1.32

Here is our current prediction chart for Euro-US$ (click for full size image):

Oil Prices (USO)

Oil prices have been going sideways since we last covered them here on the blog.

I think the current bottom period offers a good opportunity to invest some money in the oil sector for the long term. The problems around the BP oil spill have driven the prices of oil stocks to new lows. But in the longer term these events could well lead to higher oil prices in the future, because the cost for insurance against this kind of accidents will become added into the price.
Meanwhile more cars continue to come on the road in developing countries, so even in a weak economy the demand may go up.

Here is our prediction chart for Oil ETF (click for larger image):

Be well,  Danny

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