EUR/USD Prospects for 2011 with Weekly Chart of Previous 7 Years

The U.S. dollar made strong movements against euro in 2010. Initially the dollar was very strong and the EUR/USD rate declined to 1.19 but then the U.S. currency declined sharply (EUR/USD advanced toward 1.43).

At the end of 2010, the dollar was once again strong and gained a lot for a small amount of time. A firm forecast for 2011 is difficult to be made but right now we favor a stronger dollar and we expect to see a re-test of the 1.18 level and possibly lower prices thereafter.

The bearish perspectives will be negated with a move above 1.43. If a rally above 1.43 is seen, the odds will shift in favor of a rally toward 1.60 but even if this happens, the longer-term prospects before the European currency will remain glum.

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