EURUSD Bigger picture: A long and winding path to b or not to b
Updated
Ok the chart pretty much speaks for it self. I know there are those who believe that ECB will hike in sep-22 but sorry, that simply wont happen. Just because a Seagull can fly doesn't mean an Albatross automagically can. The dollar will crush the Euro, in fact it has already done so since 2009 and it will continue until we are below parity. In fact, or I believe, it's the only way this experiment has a chance to survive. The Euro is not the D-Mark even if some seems to believe so, just it's offspring and there is a sane possibility that it will transform back to it in the not so distant future. Ok that's my view and I'm sure there are many who disagree with me. Time will tell and this is only one possible time line in to the future.
Note
A Daily and more detailed view of the ongoing d wave of the weekly triangle price currently is traveling in. It should end somewhere between 1.08-09 by the end of this year or beginning of 2022 - if this count is correct.Note
4h up front, an important level here an very much don't break or die for EUR, but US is on holls today so maybe we will have a small bounce on first try, but I see no reason why it shouldn't break. Also hard to tell if blue ii is a flat as on chart, it could also be a 1-2, 1-2 combination for an extension, pointing to an even deeper structure in this wave. The trade here is obviously to sell on a break and retest. Going long is a Kamikaze act in my view, but hey don't let me stop you if you have convition based on your own analysis.Note
The Covid-19 Omicron (B.1.1.529) variant threw a wrench in to the works of market at the end of last week and it's still too early to say what kind of damage it has caused to the longer term picture. From the information that has come through over the weekend it appears as if we have had a risk-off overreaction, once again. The move in the Euro across the markets was very suspicious in my view and I expect much of it, if not all and potentially more, will be retracted. Maybe the coming week already. In any way, I like to see more data as the week takes off before I make updates to my charts, but cautiously I think this can be a buying opportunity. In fact, if Omicron competes out Delta and proves to present much milder symptoms, resulting in less hospitalizations and decreasing death figures then we may be in for an even stronger risk-on move going forward. However, it's early days yet so let's wait for the data.
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Let's have a look at the updated Weekly chart for EURUSD. Not much has changed really, despite the wrench thrown in by the Omicron hype. Price is still traveling in a contracting structure that seems to form a triangle, currently in the cycle d wave.Once the current up/down price action completes I expect this wave to continue down to somewhere around 1.10 where it will test the trendline originating at the May-14 high and resting on the highs made in Jan/Feb-18. Here I have chosen to let it have contact with as many of these highs as possible, rather than picking the very high of the week 18 Feb. It would also match with the 0.786 fib retracement at that level.
Arguably, it could make sense as well to let it rest on the candle bodies, which would mean an even lower target but it doesn't really matter as I only use trendlines as a guide of where price may go. So the true target may be in a range from around 1.11 to as low as 1.0832 (0.886 fib retrace).
From there we should have another correction higher, probably starting in the beginning of 2022 and it's too early to say with higher confidence where that one (wave e) will end, but the high from early March-20 is a good candidate although not a prediction.
Finally, my understanding is that we will reach parity and probably slightly below but it also depends a lot on in which fashion we get there and how the geopolitical and economic landscape look at that time. We can obviously expect a lot of support and demand in the 1.04/05 zone, so it's important to look then at lower TFs to see what kind of structure we have, like if we get there in what appears to be a wave 3 and 4 or if we already have reached something terminal with an expected wave 5. Well, long way to go and a lot can happen meanwhile. So we need to be aware and adjust our view if that's what the chart tells us.
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