This week was very bearish for both EU and GU, but bears didn’t really do much. All fundamentals were working in their favor, but they only managed to make 80-100 pips out of it during the whole week. Even “green” inflation numbers on friday didn’t do much damage to bulls. EU was at 750 before the news, dropped to 700 within 3 hours, but bears couldn’t even break below and bulls took over after London fix and took it back above 725. So bears managed to make 25 pips out of this event, which makes me believe that they are done and finished for now. Unless something major happens over the weekend, bulls should take over next week and keep it up all week. If they manage to break and stay above 830 on EU, then the bullish trend is back and we should see a re-test of 1.10 and possibly start a new bullish run into higher numbers.
Both EU and GU finally corrected some last week, but the question is, if it was a trend turnaround or just a correction. On the monthly chart, they are both strongly bullish and this month, even if bearish, is only in the middle. So we will need to wait until the month’s end to see how the final candle looks like. For now, friday’s move was a little overextended, so I am expecting both EU and GU to go up early next week. The drop on friday didn’t make much technical sense, but it was friday and that day rarely makes a sense, anyway. US data was beyond horrible, but someone big just kept selling, so it didn’t make a difference. I am expecting EU to go back above 900 and GU to go back above 2500, before its more clear, if bulls want to continue upwards or if bears take over again. No big news until thursday, with unemployment data and friday with Powell’s speech, so market will probably get into some position before that.
For the past few weeks, EU and GU bulls kept the higher range, but it looks like their time might be over for now. Long term, looking at the monthly chart, they can still climb 1000 pips or more…but short to medium term, a correction is more than overdue. I am not expecting much from EU or GU bears in the coming weeks, even though they might surprise me, but there should be money to be made there. 200-300 pips down are surely doable, maybe more, before bulls take over again. And Gold bulls look to be done now, too…most attempts to stay above 2000 have failed…and what doesn’t go up, should go down.
This week, FED did exactly the same as last time. But last time they made a big spike above 1.10 and this time it was above 1.09. Both times there was a big reversal afterwards. This time everything looks the same, but that doesn’t guarantee anything, of course. Normally, I would think it could go both ways early next week, but luckily, Jim Cramer offered us his “helping” hand. He says Deutsche Bank is safe and well…which means a disaster is coming soon. Waiting for bad banking news from Europe any day now. lol
Now on a more serious note. Technically, both EU and GU should retrace some more…EU could even re-test the 500-550 area and there would be another important test, if it breaks or not. I am confident we will see 850-900 again, too…so the question is which will come first…if we go towards 500 and bottom there, I will target the 900 area afterwards. We need to wait on how the week starts and if anything happens over the weekend, to provide some substantial opening gap.
The thing that helps the above case are CHF and Gold. UCHF is finishing a strong bottoming, so I am expecting a big spike up anytime soon. That would help EURO bears, too. Gold made a few attempts to get above 2000 this week, but all failed. I have a feeling that only retailers are buying it around 2000 and all the big boys are selling. So Gold is a short for me, too, for the time being.
Euro and pound did some good correction against the dollar in the past few weeks. EU reversed hard after hitting 1.10 and now it might be time to start buying it again, for the upcoming week, at least. Its the end of the month, all technicals are in favor of a long move and fundamentals did their job already also. There are no major news events next week, so I expect both EU and GU to go up and stay in the “buy the dip” mode until the end of the week.
There is really no point to write an analysis, as EU hasn’t been following any technical or fundamental rules in the past few weeks. So its just another week to wait for some correction/profit taking. Whoever is buying is not making any profit, until those trades are closed, anyway. UCHF is printing some good bottoming patterns now, so that could help EU bears in the process.
Euro and the pound have been very resilient to fundamentals in the past 3 weeks. It is very surprising that the big dollar dump didn’t have any correction yet, no profit taking. Looking at Europe, its a dumpster fire, inflation highest ever, companies struggling with the chinese lockdowns, since most need China for various products and economies beyond repair. And yet, Euro kept going up with barely any corrections…kind of like a pump before a dump situation. And now on friday, US inflation printed green numbers, which again didn’t help the Dollar much. Something is cooking underneath…and I think shit is going to hit the fan soon. Next week might be perfect for it, as volatility will be highest in a long time…inflation on tuesday, FED on wednesday, ECB and BOE on thursday and big manufacturing/services news from Europe on friday. If someone wanted to book profit, it would be a week like this. I think we will see 1.03 on EU again…possibly lower. Might be wrong, of course. 🙂
Thats why I won’t make any predictions into next week, other than for my members. I have an idea, but need to figure out what the market wants first. All active members will get my next week analysis today.
This week was very interresting. Mainly FED on wednesday and then BoE on thursday, when GU was being dumped the minute Frankfurt opened and London kept going, without any retrace. The BoE meeting then gave it the final hit. As scary as it looked for bulls, friday turned everything around. US news were positive, NON-FARM higher than expected and yet, USD was being sold heavily, which mainly EU used for a big bull run into FED’s highs from wednesday. GU couldn’t make it above 1400, but what didn’t happen on friday, might easily happen next week. From the look at the USD chart, bulls look pretty much done…I expect some climb up from them early next week, but then bears should take over. Since EU is more bullish than GU, for whatever reason, I prefer to wait for good long opportunities next week. Closing price was around 9960, so lets see how deep we can go from there. I would wait for monday’s action first…if indeed bears start with a downmove towards 9900 or below. When they do, I will start looking into long opportunities and targeting numbers above parity.
Next week will be without any big events, so USD might take a little break, which agrees with the technical side, too. When looking at USDCHF, it is at a very strong resistance and EURUSD did some hard bottoming around 0.97 this week. I would target about 200-250 pips and see how the chart looks after that. The week after next week is the ECB meeting, which will be more interresting, I suppose. 😉