DislikedOK, Ive been thinking more about this and I think there is a mistake in my analysis when it comes to timing and the wave structure!!! I keep the old post in case anyone wants to see where this comes from and where its heading. Sorry for the length!!! Here is what I wanna correct: ------------------------------------------------------------------------------------------------------- On E/U: For the leg to evolve we need the oil/equities and most importnatly China to be clear so the unwinding of carry trade and risk off does not weight on the price...Ignored
Great value at these areas and agree with your map, Chester. The trick was not to lose our shirts on the way up or better yet, profit from the volatility. I think you've got the techs covered there- definitely from a R/R point of view.
In my case it's just about taking back the key levels: the yearly levels on equities; 96.27 on the dollar (still holding the breach for now.) and 1.1143 on the pair to put a mid-term floor on the dollar.
Equities are itching to unwind the latest moves plus I suspect an asymmetric play from German GDP and we're where I suspect Yellen has to really go out of her way to further disrupt the dollar because we already priced in a very dovish scenario for the year on this brief bout of volatility. I think recent action and diminishing returns from aggressive monetary policy (especially from JPN who have been on that path for a long time.) will make her even more steadfast on the normalisation path. She's got a softer dollar to work with (for now.) too.
So anticipating common sense from Yellen and just concentrating domestically mentioning "full employment" and a focus on domestic and inflation data where there were already encouraging signs from the latter with the last NFP. And that alone dictating the path of hikes for the year. March may be off the table but once markets settle down it could be a lot more hawkish than expected.