Euro Highs in 2008

Posted by Rob

January 8, 2008

Some experts are predicting Euro all-time highs this year against the US Dollar. With the US economy faltering, a bonanza may be in store for currency traders profiting from USD losses.

Expert Opinion

According to senior currency analyst Masashi Hashimoto at Bank of Tokyo-Mitsubishi, the Euro could trade as high as $1.57 against the dollar.

It is expected that the upward trend of the Euro in 2007 will continue in 2008, marking potential new all-time highs against the dollar.

Despite this rise, technical analysis indicates a potential reversal in the second-half of 2008 for the Euro.

A Look at the Chart

From the monthly chart for the EUR-USD we can see the upward trend for the Euro. Notice the 14-day RSI is well above 70 at 76.1531, indicating the Euro is well into overbought territory.

Another element worth noting is the divergence of the RSI compared to the price action. Although the price has continued to rise, the RSI shows lower highs, with a break of resistance late December/early January.

If there was no break of resistance my thought would be an upcoming retracement in the USD’s favour, however, with the break of resistance on the RSI further indication is needed to see the likely direction.

The RSI can sometimes sit above 70 for a period of time before reversing, so this is one to watch with interest over the next month or so.

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