EUR complex - What is "cheap", what is "expensive"?
Most of the people focus only on EURUSD itself, then they say EUR is bearish/bullish or USD is bearish/bullish.
As we have ECB meeting again this week, I decided to check EUR from bird view, to show you where may be good selling opportunities if you'd like to short the European ccy.
EURUSD: on Weekly time frame it has been bearish since 1,3300 breakdown. It moved a lot without any correction, and reachedan important multi year key resistance around 1,2650 - 1,2700. The bearish trend will likely go on, but from this level it is not the best risk-reward to short EUR vs USD as some kind of correction can come any time in USD (pls check my prev posts regarding USD Indx (DXY) and other USD crosses.)
EURGBP: We had some hick up during Scotland indipendence vote, but the bearish trend resumed and still valid. At least in this cross we had some pull backs. Price is at key resistance here as well. Probably GBP is not the "cheapest" ccy either to buy ag. selling EUR.
EURNOK: To be honest this is my absolute favourite. I think both fundamentally and technically NOK is the most undervalued ccy in G10 universe. The country has excellent macro numbers, the only "problem" there they don't have debt at all, so the idiot yield hunting hot money can not flood in as there's no debt to buy :-D. Smart money is buying NOK though I think. On weekly it is still in consolidation, maybe just ajead of a major breakdown? Looks like we had a triple top ard 8,50, Price now is very close to the weekly bullish trendline. A break of trend and later the Kumo breakout will likely send this pair down to 7,70 as minimum.
NOK IS CHEAP!!!
EURSEK: This year it was underperforming NOK. The country's fundamentals are still ok, but we saw some deterioration in numbers this year, espec. compared to Norway. Now we may see some pick up, and anyway, if ECB starts printing, this pair will stop moving up too. The question is if and when we see a trend break. Maybe this week? The key level is 9,14 (trend and Kijun Sen support). It can soon become an interesting short too.
EURAUD: here I had a major surprise. After breaking the Kumo on the lower side it agressively came back into the cloud. I expected the pull back from the 1,3700 lows as there was the weekly uptrend line, but I did not believe it would move above 1,4300. Now it is considered as consolidation again. The problem here is that at current level in terms of Ichimoku it is very difficult to decide or justify a short. It is hoovering around an interest Key level of 1,4500, but it looks to be above the Kijun Sen, and also the weekly downtrend bias seems to be broken. We wait and see here.
EURCAD: this pair is likely to perform well in the future too. I would sell it on spikes for sure, but as you see the key resistance is very very close, so if no spoike, then the sell has to happen at 1,4000.
Conclusions
A) USD is probably overbought, so is GBP a bit. I would not chase these crosses here, I'd rather underweight. CAD is ok, but in terms of weighting it is probably neutral. AUD is a big question, it worths to watch, or maybe sell some but with underweight now. The big winners for EUR bears might be the two skandinavian ccys! Especially NOK looks really cheap and promising, but SEK could catch up as well.
B) Looking at the EUR complex, I don't think that the expected ECB easing (large scale asset purchases) is properly priced here. EUR has a lot more space to weaken, even against the USD and GBP. EUR will likely remain under pressure. The reason I made this analyses is to show you there is always something that not yet started to move. If you feel you missed the EURUSD or EURGBP, and you feel frustrated how to short EUR, then here you go, you have at least 2-4 alternatives still which can make a lot of profit in the future.... if ECB really delivers :-).
As we have ECB meeting again this week, I decided to check EUR from bird view, to show you where may be good selling opportunities if you'd like to short the European ccy.
EURUSD: on Weekly time frame it has been bearish since 1,3300 breakdown. It moved a lot without any correction, and reachedan important multi year key resistance around 1,2650 - 1,2700. The bearish trend will likely go on, but from this level it is not the best risk-reward to short EUR vs USD as some kind of correction can come any time in USD (pls check my prev posts regarding USD Indx (DXY) and other USD crosses.)
EURGBP: We had some hick up during Scotland indipendence vote, but the bearish trend resumed and still valid. At least in this cross we had some pull backs. Price is at key resistance here as well. Probably GBP is not the "cheapest" ccy either to buy ag. selling EUR.
EURNOK: To be honest this is my absolute favourite. I think both fundamentally and technically NOK is the most undervalued ccy in G10 universe. The country has excellent macro numbers, the only "problem" there they don't have debt at all, so the idiot yield hunting hot money can not flood in as there's no debt to buy :-D. Smart money is buying NOK though I think. On weekly it is still in consolidation, maybe just ajead of a major breakdown? Looks like we had a triple top ard 8,50, Price now is very close to the weekly bullish trendline. A break of trend and later the Kumo breakout will likely send this pair down to 7,70 as minimum.
NOK IS CHEAP!!!
EURSEK: This year it was underperforming NOK. The country's fundamentals are still ok, but we saw some deterioration in numbers this year, espec. compared to Norway. Now we may see some pick up, and anyway, if ECB starts printing, this pair will stop moving up too. The question is if and when we see a trend break. Maybe this week? The key level is 9,14 (trend and Kijun Sen support). It can soon become an interesting short too.
EURAUD: here I had a major surprise. After breaking the Kumo on the lower side it agressively came back into the cloud. I expected the pull back from the 1,3700 lows as there was the weekly uptrend line, but I did not believe it would move above 1,4300. Now it is considered as consolidation again. The problem here is that at current level in terms of Ichimoku it is very difficult to decide or justify a short. It is hoovering around an interest Key level of 1,4500, but it looks to be above the Kijun Sen, and also the weekly downtrend bias seems to be broken. We wait and see here.
EURCAD: this pair is likely to perform well in the future too. I would sell it on spikes for sure, but as you see the key resistance is very very close, so if no spoike, then the sell has to happen at 1,4000.
Conclusions
A) USD is probably overbought, so is GBP a bit. I would not chase these crosses here, I'd rather underweight. CAD is ok, but in terms of weighting it is probably neutral. AUD is a big question, it worths to watch, or maybe sell some but with underweight now. The big winners for EUR bears might be the two skandinavian ccys! Especially NOK looks really cheap and promising, but SEK could catch up as well.
B) Looking at the EUR complex, I don't think that the expected ECB easing (large scale asset purchases) is properly priced here. EUR has a lot more space to weaken, even against the USD and GBP. EUR will likely remain under pressure. The reason I made this analyses is to show you there is always something that not yet started to move. If you feel you missed the EURUSD or EURGBP, and you feel frustrated how to short EUR, then here you go, you have at least 2-4 alternatives still which can make a lot of profit in the future.... if ECB really delivers :-).
