Low volatility. Both bulls and bears waiting for more signals
As expected, it has turned rather bullish biased, but there is still no strong momentum.
Weekly:
- More neutral Ichimoku setup. Chikou Span almost hits past candles. Price is above Kijun Sen again, but still below Tenkan Sen. Basically it's been trading in a 300 pips range for last 5-6 weeks!
- Heikin Ashi is bullish, but there is lack of momentum: this week candle has lower high so far, and just marginally longer body, which is also represented in haDelta/SMA3. haDelta still has positive divergence and is slightly above zero line.
Daily:
- Ichimoku setup is as neutral as it can be! Price is above Kijun, but at/below Kumo cloud (in fact future Kumo ahead shades Price). Chikou is at past candles and within the past Kumo.
- The triangle was broken on the upper side, Price retested Kumo, but could not close above, so we had 3-4 days down.
- Heiin Ashi candle today will be very important! If it doesn't make a lower low, and sellers can't push it back below Kijun Sen, it will end up in a Kijun and prev triangle top retest. So far haDelta and candle position suggests the short term correction and bearish momentum may lose steam ard 1,1000 supp/res.
- In case Heikin Ashi gives a buy signal from Kijun support, then with high probability the next attempt to break above Kumo will be succesful and we could see more bullish acceleration above 1,1140 to target major trendline at 1,1400+.
So right now it is very neutral, but if I have to guess, I think sooner or later we'll see bullish continuation.
USD has had 10-12 months extremely strong trend, and all the game was/is based mainly on two macro factors: FED to hike and to start a tightenning cycle, ECB to keep on printing money. Now I think the followings:
If you check EUR on other crosses, you can clearly see that despite QE, instead of weakening, EUR has become a lot stronger against all majors, except USD and GBP, in which ccys market is heavily positioned bullish, desperately waiting for a hike from both central banks.
- in USD the first hike is priced in already. OK, the probability of Sept or Dec hike is changing from day to day, but it is a well expected fact by everyone, so it must be discounted in EURUSD price by now. Meanwhile there are mounting problem in EM countries hurt by strong USD, and in China too with the growth. Actually China and EM countries are becoming a big exporter of something very important for the FED: they will export DEFLATION to the whole world again! By the way strong USD started to hurt US corp profits too. US economy may be a bit healthier and in some way stronger than it used to be, but it is very fragile. If the whole world goes down again, US can't stand alone.
Now I see the FED trapped: US election year is coming, they should not risk a too early hike and risk a downturn in economy, on the other hand they should stay somehow credible, and deliver something.
So the first hike if it happens at all, and whenever it happens will be very small and rather a result of credibility issue, but I am pretty sure we will not see a tightenning cycle from FED.
The ECB? Well, as I said EUR is a lot stronger against basket of other ccys. So basically they will try to talk it down again, but by now they should have realised their QE is far not as effective as it was in US... in fact US QE was not effective too much either, so ECB QE is completely useless and causes only bubbles and price distorsions. I still believe the only reason they have started it was to "re-capitalise" and to save the otherwise completely bankrupt and insolvent European Banking system.
Anyway, trade the chart when it tells you to trade!
Weekly:
- More neutral Ichimoku setup. Chikou Span almost hits past candles. Price is above Kijun Sen again, but still below Tenkan Sen. Basically it's been trading in a 300 pips range for last 5-6 weeks!
- Heikin Ashi is bullish, but there is lack of momentum: this week candle has lower high so far, and just marginally longer body, which is also represented in haDelta/SMA3. haDelta still has positive divergence and is slightly above zero line.
Daily:
- Ichimoku setup is as neutral as it can be! Price is above Kijun, but at/below Kumo cloud (in fact future Kumo ahead shades Price). Chikou is at past candles and within the past Kumo.
- The triangle was broken on the upper side, Price retested Kumo, but could not close above, so we had 3-4 days down.
- Heiin Ashi candle today will be very important! If it doesn't make a lower low, and sellers can't push it back below Kijun Sen, it will end up in a Kijun and prev triangle top retest. So far haDelta and candle position suggests the short term correction and bearish momentum may lose steam ard 1,1000 supp/res.
- In case Heikin Ashi gives a buy signal from Kijun support, then with high probability the next attempt to break above Kumo will be succesful and we could see more bullish acceleration above 1,1140 to target major trendline at 1,1400+.
So right now it is very neutral, but if I have to guess, I think sooner or later we'll see bullish continuation.
USD has had 10-12 months extremely strong trend, and all the game was/is based mainly on two macro factors: FED to hike and to start a tightenning cycle, ECB to keep on printing money. Now I think the followings:
If you check EUR on other crosses, you can clearly see that despite QE, instead of weakening, EUR has become a lot stronger against all majors, except USD and GBP, in which ccys market is heavily positioned bullish, desperately waiting for a hike from both central banks.
- in USD the first hike is priced in already. OK, the probability of Sept or Dec hike is changing from day to day, but it is a well expected fact by everyone, so it must be discounted in EURUSD price by now. Meanwhile there are mounting problem in EM countries hurt by strong USD, and in China too with the growth. Actually China and EM countries are becoming a big exporter of something very important for the FED: they will export DEFLATION to the whole world again! By the way strong USD started to hurt US corp profits too. US economy may be a bit healthier and in some way stronger than it used to be, but it is very fragile. If the whole world goes down again, US can't stand alone.
Now I see the FED trapped: US election year is coming, they should not risk a too early hike and risk a downturn in economy, on the other hand they should stay somehow credible, and deliver something.
So the first hike if it happens at all, and whenever it happens will be very small and rather a result of credibility issue, but I am pretty sure we will not see a tightenning cycle from FED.
The ECB? Well, as I said EUR is a lot stronger against basket of other ccys. So basically they will try to talk it down again, but by now they should have realised their QE is far not as effective as it was in US... in fact US QE was not effective too much either, so ECB QE is completely useless and causes only bubbles and price distorsions. I still believe the only reason they have started it was to "re-capitalise" and to save the otherwise completely bankrupt and insolvent European Banking system.
Anyway, trade the chart when it tells you to trade!
