EURUSD -- Contrarian View- Everything is Oversold
The Turkish LIRA and the spoiled brat " ITALY" are causing CARNAGE in the Currencies . The US Dollar ( DXY ) Since Friday has been obliterating all currencies.
EURUSD from 1.1537 to now 1.1364 ( 173 pips) and possibly more. So what do we do ?
- Turkey needs to fix the LIRA issues
- ITALY needs to have a budget supported by EU
- EURO Zone slow down is real but we can muddle through
- US data is good but DXY has factors that still make it vulnerable
Some of this issues are temporary.
Since every chart from 3-hour, 4-hour, and daily are extremely oversold . I will take the suicidal " contrarian" view. The Dollar carnage is a wrecking train heading upside while the EURUSD will go the opposite direction ( Downside)
Action:
Trade: BUY
Entry : 1.1364 to 1.1375
Exit: 1.1550 to 1.1575
if EURUSD goes below 1.1350 cancel the trade and wait for it to stablize and then buy the relief rally:
EURUSD from 1.1537 to now 1.1364 ( 173 pips) and possibly more. So what do we do ?
- Turkey needs to fix the LIRA issues
- ITALY needs to have a budget supported by EU
- EURO Zone slow down is real but we can muddle through
- US data is good but DXY has factors that still make it vulnerable
Some of this issues are temporary.
Since every chart from 3-hour, 4-hour, and daily are extremely oversold . I will take the suicidal " contrarian" view. The Dollar carnage is a wrecking train heading upside while the EURUSD will go the opposite direction ( Downside)
Action:
Trade: BUY
Entry : 1.1364 to 1.1375
Exit: 1.1550 to 1.1575
if EURUSD goes below 1.1350 cancel the trade and wait for it to stablize and then buy the relief rally:
Comment:
Where are the EURO Bulls ? -- I call them the " EURO Chickens " . They are afraid of the Fox
Comment:
US Dollar is well Supported . Everytime EURO Bulls / Chickens make a run for the woods they get pulled back. It's like the "MAFIA" , its easy to get in but hard to get out .
The EURUSD has been rejected 2 times now around 1.1415 Area so that a strong resistance . Where are the EURO Bulls or Chickens anyway ?
The EURUSD has been rejected 2 times now around 1.1415 Area so that a strong resistance . Where are the EURO Bulls or Chickens anyway ?
In an attempt to stem the Lira’s decline, the Central Bank of the Republic of Turkey (CBRT), the nation’s central bank, intervenes by lowering the Lira required reserves by 250 bps for all maturities.
Key Highlights:
Cuts required reserves ratios for non-core FX liabilities by 400 bps.
Now allows the use of Euros to be used for maintenance against lira reserves under the reserve options mechanism.
With these changes, some TRY 10 billion, USD 6 billion, and gold liquidity equivalent of USD 3 billion will be provided to the financial system.
The USD/TRY cross is seen reversing its rally above 7.10 levels on the CBRT intervention, now trading around 6.4200 levels, still up +1.10% on the day.
Originally posted By Dhwani Mehta from FXStreet