I continue to be the only one in the world who forecasts EURUSD at 0.87 - with Treasuries and Stocks crashing in sync. This seemingly innocuous move will bring the entire financial system to its knees.
This Friday both EUR and GBP have reached their cyclical tops, and starting next week a sharp decline in both will begin. On top of that, EURGBP (and other xEUR crosses) will resume the downtrend, all driven by the crash in Treasuries and spiking demand for the Dollar. As a result, the Euro will be falling faster than any other major currency. It is my assumption...
All currencies are preparing for a bug plunge which should be cause by the crash in Treasuries. The small remaining upswing in the Euro is the last bearish price action before the real plunge begins.
This move is unstoppable. Remember: by the time the move ends, the market always forces you to abandon your beliefs. What will it take to make everyone relinquish the popular idea that low yields are here to stay forever? A move to 5%, or even higher. Consider also that this swing is the last one in a 2-year long sequence (wave C of E). This move will accomplish...
The market peacefully lives through the last days of calm. A crash in Treasuries will shatter the financial order established 50 years ago. SPX targets 1500. 10Y will skyrocket to 4..5% EURUSD will be pushed to 0.86..0.87 The story of the dollar, yields and stock prices are tightly related. It all began in 1971 when the US unpegged the dollar from Gold. Real...
Expect a bounce at precisely 0.618. Wave C of E should be quick and will cause overwhelming pain. The final moves in currencies, stocks and Treasuries should be perfectly synced. Nearly tick-for tick: EURUSD should crash to 0.86, SPX will get dispatched to 1500, and 10Y will hit 4-5%. The dollar and the Yen will be the sole survivors. (USDJPY below 100).
Here's what I expect next: 1. USDTRY goes to 25 and beyond. 2. Turkey defaults on its debt. 3. Deutsche Bank demands a bailout. 4. EURUSD crashes below 0.90. 5. 10Y US paper goes to 4..5% 6. All yield (stocks and debt) loses 2/3rd of value. The Butterfly Effect in action.
EURGBP shows more resistance than EURCAD and EURNZD. Same structure for all three starting March 2020, but in the latter two the green 1 and 3 are much more pronounced while EURGBP resists to the last dollar in traders' pockets. Never underestimate the power of the last overextended subwave: At least a 1000 pips downside in EURGBP is still due, should take 5-6...
Next week USDTRY should break above 10, followed by a brief correction. The transition from 10 to 20 can take less than a month (the Russian Ruble crashed from 6.40 to 20.6 in three weeks in 1998). A crash of Lira is detrimental for EU banks: Deutsche Bank will go full kaput and the Euro will crash to 0.88 at the same time.
It's hard to believe, but 3-4 weeks from now the 10Y yield will break above 3% (could hit 4..5% in a couple of months). This should cause all stock markets to lose 2/3 of their market cap, and should bring EURUSD way below parity (0.88 is the target). For the last few months the cycle always ended around the 20th of the month. Just compare DB, TLT / TNX - if you...
1-2-1-2 is completed, now wave 3-of-3 is about to begin, roghly 1000 pips down. Other EURxxx crosses have resumes their descent as well. Starting the coming week the Euro will be pushed lower and lower as part of the sell-off in all base pairs, but also as a result of EUR getting weaker vs other currencies. The root cause of all of this is the crash in...
The amount of destructive power accumulated in the markets is unprecedented. All bubbles are going to pop at the same time. The short dollar, the long stocks and all other yield: all will unwind (unexpectedly as usual) in the most violent fashion. We are going to see a nearly 100% correlated move in all instruments. I track around 40 symbols and all of them stage...
USDTRY is unstoppable - so far it feels like a very shallow correction in orange w2, and this is really the last stop before Lira crashes to 20 handle. Such moves in peripheral currencies often act as precursors of bigger trouble. Here's what to expect soon: - 10Y Treasuries are ready to spike to above 3% (4..5% very likely), - Crude still has to revisit...
I continue to be maybe the only person in the world who forecasts EURUSD at 0.88 in the next leg down. The reason I think it will drop so low is because GBPUSD targets 1.10 and EURGBP targets 0.72..0.76 and I think both will go down in synchrony. Consider also that EURJPY is supposed to go below 90 as it continues to leave a 10-year long triangle. I do...
I continue to be one of the very few people on the planet who clearly see EURUSD at 0.88 as the next meaningful target. The fundamental reason for this is the coming crash in Treasuries, which will generate a historic run into the Dollar. The technical reason is the structure in EURJPY. It is entering wave 3 of triangle thrust, targeting 90 or below. Add to this...
It will take another few months (weeks) for the market to realize that the true value of DB is zero. The panic in the markets will force ECB to bail out DB, which will bring EURUSD to 0.88, and only after that the Dollar will start weakening for real.
Just a humble reminder that this time we are heading to 0.88. Turkey will be forced to devalue the Lira (USDTRY heading to above 16), and likely will default on its debt, which will take down the EU banking system, which will force the ECB to bail out Deutsche and other big fishes, which will cause a rapid plunge of the Euro to the levels not seen in this...