Weaker Still......and going down further

People following my blogs may remember one of my blogs in January ( http://forexpredictionstoday.blogspot.com/2008/03/quite-in-line-with-what-was-being-said.html%20) )where I had placed my suspicions on the state of affairs in the US.
I quote " I have reasons to believe so..... Remember Mr Bernanke saying something on some Banks failing......Watch out for that. I believe he was not saying out of turn. Also watch out for the 12,000 mark on the Dow. If it slips, and slips convincingly even for a week, then new market realignments may take place not only on the forex side, but also in other markets worldwide." Unquote.

Cut back to the present. The Dow has made a convincing retreat in the sub 12,000. Freddie and Fannie are near collapse. And to add salt to wound, there comes the news of a dollar beating in the light of speculation of further loss reporting by several US banks. The Bernanke statement the other day also indicated that things may not even out so soon and may take a year or two to resurrect.

Oil though seems on a rollor coaster….from 132 to 140, then back to 133, move ahead to 142 onwards to 146 and now 138. Phew! What a ride. But wait! Its still not over. And I am not eating my words too (remember my last blog?). Wait for a scaling up in the 145-150 region in the coming weeks. And a further leveling at 150-158 in the next few months.

So, where does it all lead us at?? Economic powerhouse in tatters, weakened world markets, and no good news. Expect the Dow to keep testing 11,000 every now and then from the top and below it, while managing to slide down towards 10,000 ( the possibilities have arisen, and if it happens, please brace yourselves for a volatile future ahead). The Forex markets, as I had opined in my last blog (“Expect the greenback to weaken against both the Euro and the Yen. Though the Yen remains range bound in 105-108, I would bet on the strengthening of the yen to the narrower 105-106.50 range. The Euro as I have been saying, is difficult to beat below 1.55. The trends now indicate a reigniting of the 1.59 and 1.60 resistance levels.”) remained true to me (current markets – 1.5904 for the Euro and 104.62 for the Yen). I would slightly alter my near future perception on these two currencies. The Euro should now find a cushion within the 1.57 to 1.59 range in the short run with a bias towards 1.59 and beyond. This essentially means that it will in all likelihood march towards the 1.60 mark, but breaking it convincingly to me seems a distant possibility now. The Yen on the other hand is comfortable in the 105 region and should do a 103.5 to 106 in the coming week, with the possibility to stay near the 105 mark mostly.