Regarding EUR/USD, I strongly suggest you do not fall into the trap the Euroweenies are setting for themselves. They still harbour the old quasi-macho ''strong currency'' attitudes left over from the days of the gold standard and Bretton Woods. These days, when all currencies are fiat only, the proper game is that of ''beggar thy neighbour'', not ''look how strong my currency is''. And they're about to pay an enormous price for this idiocy -- how does a semi-permanent recession sound?
That's what they're headed for if EUR/USD stays above $1.20...and that's the GOOD news, believe it or not. EUR/USD isn't just going to stay above $1.20 (with perhaps a dip here and there to $1.1450 or so), it's headed for $1.30 in fairly short order, conceivably even higher. The Bush administration won't say a word about it, indeed, they're encouraging a weakening dollar with almost all their policy decisions, and betting that capital flows won't dry up significantly before next November (pretty good bet, in my view).
USD was wildly overvalued throughout BJ's second term (which fact led to, among other things, the stock mkt bubble), and now it's coming around to more realistic levels. Enemies, it's our enemies weakening the dollar? Nope, not at all -- this is one of the best things that could happen to the U.S. economy (and, no, before you ask, I'm not an exporter).
Things should get even better for the U.S. as the dollar weakens vs. Euro. The idiots in Wonderland, esp. Trichet, are already muttering about -- are you ready for this? -- currency controls. PRAY for this to occur. Europe's last go at imbecilic currency controls was THE principal leveraging factor in the U.S.' favour in the trade boom after WW II and into the 1950s. This time, things will be MUCH sweeter for us, because capital (since 1973) has become quite accustomed to going where it damned well pleases whenever it damned well likes. If the Euroweenies think that they can reverse this attitude with some scheme of ''currency controls'', then they've overloaded their bong and have been hitting the MD 20-20 way too heavy.
Might as well enjoy the ride; suggest writing IMM Euro puts each month on ANY dip, use 350-400 pips below the mkt for the striking price. Should be eay money, duck soup until Greenbean starts raising the FF rate (figure the March FOMC meeting for that, btw, possibly the May meeting).
Sorry for the typo.