So my previous post for EURUSD this week did not give us our break out signal. Again, we await the pattern and then we await for the break and close. If we do not get it, no trade.
It seems we have another chance of a reversal here. Although, on the daily chart it seems like the support comes in at 1.0800.
We are back at testing the flip zone of 1.0950. From here we shall see if we form a lower high for a continuation of the trend (remember we need a lower low to confirm this), or if we perhaps create our first higher low, which comes from a pullback and then a break above the flipzone of 1.0950.
A break above this zone also is a break above the previous lower high which would nullify the downtrend. However, we prefer patterns for more confluence, so we want to see a higher low to confirm a head and shoulders pattern. Be patient.
On the Fundamentals, we saw a bad PMI print. If you follow my work I have been warning of a recession. A recession is lagging because we need two consecutive contractions meaning when a recession is officially announced, we have been in one for 6 months already.
PMI tells us what is coming, while CPI tells us what has already happened. The car analogy is PMI is looking out the windshield, while CPI is looking through the rear view mirror.
President Trump wants a weaker dollar. His twitter outburst tells us this as well.
However, please see my attached posts below where I talk about the Dollar going HIGHER. This is why the Federal Reserve is stuck. I believe they are cutting rates to try to weaken the dollar, but using excuses like uncertainty and mid cycle adjustment. The US Dollar will go higher due to it being the safe haven/reserve currency and because American treasuries/debt still yield a decent amount. Imagine being a fixed income pension trader in Germany. Will you buy German bonds yielding negative, hoping to flip them to another fool who will buy it, or US treasuries that yield something (although not much).
Read my other posts on why China and Russia are attacking US Dollar demand. This is why Iran is key to them. I believe they will bid the Dollar up because they know all the problems in the world exacerbate with a stronger dollar. The US will be forced to KILL their Dollar. Perhaps another Plaza Accord type event where the Dollar got so strong that it had to be devalued by 40%.
It seems we have another chance of a reversal here. Although, on the daily chart it seems like the support comes in at 1.0800.
We are back at testing the flip zone of 1.0950. From here we shall see if we form a lower high for a continuation of the trend (remember we need a lower low to confirm this), or if we perhaps create our first higher low, which comes from a pullback and then a break above the flipzone of 1.0950.
A break above this zone also is a break above the previous lower high which would nullify the downtrend. However, we prefer patterns for more confluence, so we want to see a higher low to confirm a head and shoulders pattern. Be patient.
On the Fundamentals, we saw a bad PMI print. If you follow my work I have been warning of a recession. A recession is lagging because we need two consecutive contractions meaning when a recession is officially announced, we have been in one for 6 months already.
PMI tells us what is coming, while CPI tells us what has already happened. The car analogy is PMI is looking out the windshield, while CPI is looking through the rear view mirror.
President Trump wants a weaker dollar. His twitter outburst tells us this as well.
However, please see my attached posts below where I talk about the Dollar going HIGHER. This is why the Federal Reserve is stuck. I believe they are cutting rates to try to weaken the dollar, but using excuses like uncertainty and mid cycle adjustment. The US Dollar will go higher due to it being the safe haven/reserve currency and because American treasuries/debt still yield a decent amount. Imagine being a fixed income pension trader in Germany. Will you buy German bonds yielding negative, hoping to flip them to another fool who will buy it, or US treasuries that yield something (although not much).
Read my other posts on why China and Russia are attacking US Dollar demand. This is why Iran is key to them. I believe they will bid the Dollar up because they know all the problems in the world exacerbate with a stronger dollar. The US will be forced to KILL their Dollar. Perhaps another Plaza Accord type event where the Dollar got so strong that it had to be devalued by 40%.
