Let’s talk a bit about USD. December job report has been strong with the US economy adding the most jobs since February. However, an increase in average hourly earnings won’t be enough to keep the dollar strong this year. Yes, over the short-term, we will see a rally in USD, but over a long-term dollar will dive.
We expect 2 rate hikes this year. In recent speech Powell said all need to be prepared for flexible policy. This message brought worries into the markets. I don’t think investors trust much Powell and Fed. And should they?
Greatest periods of economic growth were till Fed was established. What happened after? – Well, 10 recessions, few bubbles, Great Depression… Thomas Edison and Henry Ford warned us about this useless and dangerous system.
I am not a Fed hater and I don’t think Fed as institution is a problem. Most important is how it’s managed, its policy and how transparent it is. Fed is trying to do all to keep you (and your money) away from gold and other markets. All they want is to sell their debt notes. Yes, Fed is a huge debt machine. The result will be terrible. I believe the debt bubble will be reason of the next financial crisis. I know many people trade crypto. But I don’t think it has a future. Central banks could make electronic central bank money many years ago. But they didn’t, because they don’t need it. There is no place for crypto in the central banks system. Sooner or later blockchain will be killed, as it happened with Esperanto. To be honest crypto is the 21 century version of tulipomania – don’t spend your money and time on it. Trade and invest into real assets ans it’s derivatives.
A few weeks before the finicial crisis Bernanke kept repeating how strong is US economy and no drop of real estate prices will happen, having clear understanding world economy was in danger. What did they do to prevent it? – Nothing. Were they so stupid to fail? – No, they just didn’t care. $ 6 trillions were given out to support banks. Isn’t that funny? – Banks created 2008 crisis playing Mortgage CDO. Always, taxpayers pay for the crisis, not banks or Fed. Think about it, maybe Henry Ford was right and we have to change the system? But let’s come back to making money and see EUR/USD chart.
Based on Fibo levels, I expect 1.1425 should be tested So, watch this range and go short if it gets rejected with same sl above daily resistance. Wave 3 should send this pair to 1.11650 and final wave to our target 1.11200. This range should be reversal point and big buying opportunity for long term traders.
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