Wednesday 23/11/2011 9PM CET

As expected the Dollar had another push up and hit the Euro and other risk currencies hard, while we should see some counter trend action, we expect it to be brief and the dollar is a buy on dips.

Euro zone continues to lurch forward to its inevitable long term demise and seems like there is nothing to save it long term, although in the short measures could be taken to restore confidence but policy is divided and I don't really think the Euro zone leaders realize how bad the situation now is becoming – its now critical and action needs to be taken soon to avoid the zone plunging us into a global recession.

Before we look at the news, let's do a quick round up of all our positions which are all doing well today:

Summary

ALL positions are same as yesterday - We have not taken our usual 50% of position in on majors below because as we said on Monday any bounce would be weak and the currencies look all set to sell off again and they have all had good down days today.

AUD/USD: Were short AUD from 10800 and have been swing trading all the way down and taken the break through 1.000. We are now down at below 97.00 and 98.00 is still good support to sell back too. We expect our target of 90.00 to be hit before year end and think we could trade as low as 80.00.

GBP/USD: We have been trading the short side of the Pound since 1.61 and loaded up on the rally to 1.59 and its sold off hard – were now below 1.56 and resistance is at 1.57 and then, firm resistance at 1.59.

CAD/USD: We have been trading the CAD short since 1.010 and loaded up on the failure to take out 99.00 and we are falling hard – rallies to 97.00 look like selling opportunities and we are putting our stops behind 98.00.

EUR/USD:We were short from the pop up to 1.42 booked all profit at 1.36 and re sold into 1.38 and 1.36 and were now down below 1.34. Rallies to 1.35 look like selling opportunities and stops are behind 1.38. We are targeting 1.30 or lower.

USD/JYP: We remain dollar bullish on break of 77.50 supported by momentum and think we should run onto 79.00 if break occurs and were looking for a close above 77.50 to get long.

Trading volume should lighten up tomorrow as we move towards the thanksgiving holiday on Thursday so expect volumes to be thin into the end of the week which could create some price spikes.

Euro Crisis Continues and Policy Makers Do Nothing

Heading for the Inevitable End

Borrowing costs are rising across the zone as countries which were thought to be safe such as Austria start to feel the heat and now we have Germany getting a reality check.

Germany had one of its least successful debt since the launch of the euro. In response, the euro fell to as the German debt agency was forced to take back just under half of a sale of 6 billion euros due to a lack of demand. Germany's borrowing costs moved up above those of the United States for the first time since October. The new bond had a yield of 2.0 percent, the lowest ever on an issue of German 10-year Bunds. The auction's average yield was 1.98 percent, down from 2.09 percent for the previous benchmark in October.

Finance Minister Wolfgang Schaeuble's spokesman said the bond sale flop didn't mean the government has refinancing problems and it doesn't but it shows that German bunds are no longer the safe haven they were and if things get worse in Euro zone, they will continue to see weak demand. The auction flop is more psychological than anything else but should really focus policy makers on finding a solution. Alas this of course is Euro zone - no clue on what to do, no decent policies, divisions everywhere and an arrogance that the worst won't happen but if they don't wake up soon, we will be looking at a big country defaulting and the Euro zone plunging the world into a decade long recession.

The obvious and only solution now is - to use the full power of the ECB to restore confidence but Germany is not moving on this issue. As far as Germany is concerned the ECB should not be used:

In a speech to the Bundestag, Merkel issued one a warning about meddling with the ECB'S inflation-fighting mandate. She also dismissed European Commission on joint Euro zone bond issuance, calling them "extraordinarily inappropriate."

So why won't Germany do what is obvious to save Euro zone and get the ECB involved?

Because Germany has the deep pockets and will end up paying to bail everyone else out.

They will resist for now but the day is coming where if they don't Euro zone will see a country or countries go down and collapse in disarray. We think a crisis will have to come to a head, before Germany moves and that means more downside for the Euro.

In its current form Euro zone is dead. We said this over a year ago and it is – it may not be tomorrow or next week but the current order is over.

Even if we do see Euro zone survive in a slimmed down version with tighter, economic, political and fiscal integration, it still faces a recession which could last a decade or more. All this could have of course been avoided but the structure of Euro zone means there are to many vested interests and no policy can be agreed – what a shambles and its the ordinary hard working people who suffer.

Over in the US – Economy Still Remains Sluggish

Consumer purchases, which account for 70 percent of the economy, increased 0.1 percent after 0.7 percent gain in September with unemployment near 9 percent and confidence at recession levels, its hardly surprising that consumers are not really spending. With slower GDP growth than expected and the dire jobs situation we have a long road to recovery.

The global economy is slowing and data from China today was also poor – all in all a gloomy day on the markets and OK we made money but wish that leaders would grasp what needs to be done, to protect good and decent hard working people all around the world.

GET an FX Course Plus:

In Depth Technical and Fundamental Analysis on the Link Below

To read more, on the major currencies and their outlook from a technical and fundamental perspective and to get a 250 page course of proven strategies, tools daily technical updates and full 1-on-1 support – Go too:

http://www.learncurrencytradingonline.com/subscribe.html