EUR/USD
Finance ministers from the G8 nations said surging food and fuel prices have replaced the credit squeeze as the biggest threat to the world economy. They also spoke out in favor of a strong dollar. Next week we will see if the markets got the message. It is clear that the weak dollar is one of the main causes for the high commodities prices. But the markets are driven by speculative order flows rather that fundamental factors these days. In the next few weeks the Big money will show if the path of least resistance is up or down for EUR/USD.
This week the focus will be on the 1.5280 support. If it gives way next downside targets are 1.5145 and 1.4970/80. Rallies should be capped @ 1.5430/40 and 1.5570.
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