The Fed is expecting a negative cut in interest rates. A week ago, I wrote about the Fed cutting the dollar rate to zero. This is exactly what my fractal analysis showed. It is therefore advisable to continue along this path. Current analysis shows that 3-month US government bond yields are ahead of further decline. This predicts a further cut in the dollar interest rate to the negative interest rate range. I also assume that the dollar will have lower interest rates (negative interest rates higher) than the euro. Therefore, in the shorter term, I expect further strengthening of the euro.
What does 'euro' mean? Do you mean EURUSD? Or do you mean you see the EURO strengthening across all currency pairs?
My thoughts on the EURO itself, is that it is likely to weaken across all pairs. Reason: Europe is basically locked down. Supply-demand shock will forseeably hit hard an already failing economy. We saw what happened to China and it's currency. Italy is likely to bust bringing down the whole EUROPEAN house of cards (or like a set of dominoes falling in sequence). NOTE carefully I'm talking about European economy and the strength of the Euro across other currencies.
meszaros
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@Captain_Walker, Yes. The question is legitimate. :) EURUSD is looking forward to the north.
Captain_Walker
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@meszaros, But there is a problem. US Dollar in itself is still the new liquid gold (after Breton woods etc). Gold has been failing. US Dollar has been strengthening across 5 other currency pairs (see DXY). Some will argue this is short term. I don't know how they know that. I can also see the US Dollar going south across other currency pairs.
The EURO itself - unbeknownst to the European Union was orchestrated in it's creation by the USA. Did I say the USA created the EURO? I did not! For deeper insights on this some will need to study Varoufakis and Chomsky. My theory is that the EURO was a trap. The Europeans were led into it. They thought it was great - it wasn't.
The EU has been plagued by gross corruption and mismanagement (hard evidence exists for those who want to see). The treatment of the P.I.G.S alone is sufficient evidence. Then Italy has been set up to fall. Yes there is corruption elsewhere, but the type and scale of it in the EU is of another dimension. I don't do teachings, so people will need to do their own reading. YouTube is a good resource.
meszaros
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@Captain_Walker, I wouldn't bury the gold yet. Indeed. I see the current move as a correction, followed by a multi-year rise. I don't see the explanation fundamentally, but I see this correction on fractals, which can go up to 1330-1360 usd. Then I expect a rise of nearly 2500USD.
mikeUkTrading
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@meszaros, I also looking towards bounce from this levels. Just, let's keep closly looking on this fast moving bull flag on H1 and see what's about.
Captain_Walker
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@meszaros, I wouldn't bury gold yet either.. gold is not dead - ever. Fractals and technical patterns are images we extract from charts and inferences we make about possible futures. Fundamentals are the hard reality. Just to be clear, I am not a 'fundamentalist'. I rely on technical patterns of any sort. However, there are times when fundamentals matter. When I see 6 central banks joining together there is a reality to that.
My thoughts on the EURO itself, is that it is likely to weaken across all pairs. Reason: Europe is basically locked down. Supply-demand shock will forseeably hit hard an already failing economy. We saw what happened to China and it's currency. Italy is likely to bust bringing down the whole EUROPEAN house of cards (or like a set of dominoes falling in sequence). NOTE carefully I'm talking about European economy and the strength of the Euro across other currencies.