Is the Euro the currency of the future?

The currency paid EUR/USD is the most significant currency pair in the forex market. It is the most traded and is a clear indication of the strength of the American dollar with respect to the European Union and most of the world markets. However, most people are unaware that the strength of the USD rests heavily in the positions of two non-American markets. These are the Oil market and the Chinese Market. China holds the largest concentration of the dollar in the world. It historically was used by China as the ‘interface’ to the world and still the US is the largest trading partner. Additionally, the price of Oil has been always fixed to the greenback. With the price of oil dropping lower daily, the world trading energy partners do not require as much of the dollar in reserves.

There has been news lately of more pressure for the oil to switch currencies. This would clearly have detrimental effects on the USD. Looking at the latest news item, Lithuania is the first of the Eastern economies to switch to the Euro. This change is effective January 1st, 2015 and can be read in detail here.

Yesterday Morgan Stanley cut the forecasts for the oil to $53 for the 2015 Calendar.  This is down 15% from the original forecast.  You can read in detail here.

Looking at the current price of $63 we can expect the markets are all down.   You can find the latest oil price from Nasdaq here.   The EURUSD is therefore up due to all the stress on the volume of USD.   Here is the daily chart:

The EURUSD is bullish at 1.24250. It has a support of almost at that level with resistance as high as 1.25930.
The 30 minute chart is even more apparent:

The trading position is as high as 1.24450. On the hourly chart below we can see the resistance has been broken from 4th of December.

As the price of Oil drops and countries push to the EURO we could see significant decline in the strength of the greenback. Investors should plan and trade accordingly.