DislikedMy motto for Monday: Don't rush in selling! Wait until bulls are completely done, because I believe bulls will scratch and tickle 1.0806 area before they ever give up. (...and of course robber banks will always do their best to keep our minds confused until bears really kick in!) The levels I think bulls are likely to revisit are: 1.0755 OR 1.0777 OR 1.0803... any of these could be touched inside Monday or Tuesday, so beware! That's my thoughts for now, keep enjoying your weekendsIgnored
Two weeks ago everyone feared a 0.75% hike by the FED - and now they are suddenly talking about “maybe” pausing in September… or taking only a 0.25% nip from the mug. In opposition the ECB sounds quite determined to go for 0.5% out of the gate after a “century in hibernation”.
That does not look like a solid ground for USD gains because the yield gap between EUR and USD, that was big a few weeks ago, stopped widening and is getting a little closer again. Under this circumstances there is no drop of the EUR to expect. The bounce in equities is supporting this too. From this perspective we could relative fast see the 1.10/1.11 zone. I expect within the next 4 weeks.
Then we will have to expect a reversal. US economic conditions worsening fast, faster than expected by many and the FED could find themselves trapped. They will sure hike 0.5% in 2 weeks and end of July but the July hike could rattle the market considerably because if Q2 earnings come in bad (and they start rolling in starting mid July) that could send the equity market crashing -> so along the shrinking the Fed’s balance sheet that should give a strong USD again.
Technically I expect for the remaining 2 days of the month a potential move up to 1.0820 +-, the trend line that connects the 2016 low and the 2020 low.
For the new month I see clear potential to 1.1050 +- and... if during the summer the US economy goes into a nosedive and Powell pulls the handbrake (aka gives a comment that he will surely pause in September) then I see 1.1380 +-
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