EUR continues to strengthen against USD. Increased inflation in the EU, which the European Central Bank is intending to continue the fight with, regardless of everything and strong growth in the European economy (which is expected to slow down slightly in 2008, but accelerate in 2009) is supporting EUR. It is expected that interest rates in the EU will remain at 4% at least until the third quarter of this year, and then as inflationary pressure in Europe reduces interest rates will fall, causing decline of European currencies as well as additional support of the growth of the European economy. Considering reducing rates in the EU and the victory over the recession in the United States EUR/USD will change the ascending trend to descending one, which will mean a new cycle of the world economy. It is expected that after the growth of EUR/USD over 6 years (since the introduction of EUR), there will be a three-year period of declining. Perhaps the absolute maximum of pair will be recorded at the current points. Difficulties in predictions have been presented by the fact that at the current positions the price has not been located yet, but chances are 1.5875 mark will be tested. On Monday any significant data on the European economy will not be published, so the emphasis will be placed on market statistics from the USA
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PoltekFX Analytics