Slow and Realistic Euro Sink

With humongous US budget slump it is hard to get thrilled about the US position and dollar outlook. Overall confidence in short term the euro zone economy is likely to dip further. Euro is going to come further down against the dollar. The best strategy now is to sell euro on rally above the 1.3350 level.

After slipping on Thursday and Friday, the euro eyed strong recovery on Monday. Trading liquidity is still very low especially in European market due to Easter holidays. From 1.3120 the euro rallied around 1.3390 in New York.

After doing great than the expected outcome positive earnings data from the US banking sector would help and would lean to lessen dollar demand.

There will be still lying dark clouds in the euro zone economy with default spreads on German debt lying higher. Comments from ECB officials have confirmed that they are going to continue further interest rates cut again. Euro weakness was illustrated by declines against pound and the franc over the last 24 hours.