Where will Euro Dollar go?

In last two months, big news related to Euro dollar were Greece debt and France president election. From May 25, 2012 - a major shock: Bankia, one of Spain's largest banks, reveals it needs an additional $23.8 billion to cover massive losses. The Spanish government simply does not have the money to help.

In fact, Spain's Retail sales plunge 9.8% in May, and the country's unemployment rate is 24.4% and continue to rise to unheard-of levels.

On May 30, a new, unexpected element to the crisis: The world's biggest trade credit insurer suspends all new coverage for anyone shipping goods to Greece. The result is key sectors of the Greek economy could be paralyzed, making it virtually impossible for Greece to meet its debt payments - despite all its bailouts.

Last Friday, June first, a big shock from the U.S.: 65,000 new jobs - the worst U.S. job numbers in a year. Suddenly, global investors begin to recognize what we've been saying all along - that this year's U.S. "recovery" is a mirage. The Dow plunges 275 points. Gold explodes by $60 per ounce.

Meanwhile, analysts estimate that, even without any further decline in its banking crisis, Spain could need a bailout of up to 50 billion ($560 billion), virtually wiping out Europe's available bailout funds in one fell swoop. And that's not the worst-case scenario! In the midst of a banking panic and the resulting economic collapse, Spain could become a bottomless pit for which even $1 trillion would not suffice.

Today, the European Central Bank (ECB) meets in Frankfurt: They're supposedly to decide what to do with interest rates, but more importantly, to come up with a scheme that somehow averts an all-out run on European banks.

In fact, just in the first three months of the year, Spanish banks suffered net withdrawals of $121 billion. And that was before the May 25th announcement of Bankia's huge losses that is a major blow to confidence of savers, prompting an even greater run on Spanish banks.

Next Monday, June 11, that's when the International Monetary Fund (IMF) issues its first report on European bank deposits since the latest phase of the crisis began to heat up. The IMF report could be a shocker, revealing massive withdrawals already under way prompting even more bank runs ... and making it virtually impossible for the ECB to stop the panic.

Do we need pay attention to such news? In fact, it's full of rumors regarding markets as always. It's hard to trade just based on news.

Current EUR/USD is 1.2500, which was 1.3200 in early April. The EUR Forex is down $7,000/contract in about one month. People wonder, will the Euro dollar down trend continue or end soon? EUR/USD rebounded from 1.2300 for three days and some "experts" already talked at CNBC that Euro dollar could not go too far below 1.2400 etc.

Without knowing any of all those news, just from the chart of AbleTrend in this newsletter, we clearly see the current down-trend began around early April, and the key resistance level is 1.2646 currently. In fact, AbleTrend indicators cannot be used for "forecast" or "prediction" of what market will do. It simply tells what the market "is doing". It's "trend-following". It visually displays the fact after the market moves. We clearly know the current EUR/USD market is in a down-trend, but it cannot predict how low it will go or when it reverses. No matter what the analysts or experts said, we believe all the elements and news already fact in the price. We simply follow the signals of AbleTrend to trade the markets.