Chart of the Week !! - EURUSD (Weekly) - ridethepig

A good time to review the long term chart in EURUSD as we approach the end of wave 2. This is coming at a time where global growth comes in at 2.6% vs. 4% last year; GDP although still growing at +/- 3% is priced on the US-China resolution nearing the final few pages.

On the USD side, for the macro we have recession risks ticking higher (although now looking more like Q120 with odds at 64% as per my models). Although Fed should not cut they will likely bow to the Whitehouse and deliver another 25bp in October with no signs of rates getting back above 2% till after the elections.

On the EUR side, the macro side is very soft with manufacturing weakness, soft GDP growth all based upon a soft Brexit and no tariffs from Trump. Those following in the Telegram will know odds of any soft Brexit deal before the deadline are still very low. For the monetary side, the ECB have room for another 10bp in Feb 2020 which will allow QE to run all the way through till Q321 - Q421. Inflation is showing no signs of picking up, however it will allow EUR to become useful to make carry trades.

The long term map we made back in December 2018 is playing out as expected:

For the technicals we have the current value area for those buying the cycle lows, I expect the test to hold and bounce today. Though I do see vulnerability for a test of 1.087x with a no-deal Brexit we are starting to get clues in EURJPY and EURCHF that the fresh floor is coming.

Best of luck all those looking to trade the Euro bull rally, this is going to catch a lot on the wrong side as the push up factors are coming from an advanced monetary policy perspective. Positioned for the first part of the move:

Thanks for all the likes .. Jump in with your charts and comments!

Comment:

For those in EURJPY

Comment:

Comment: