WHAT THE EURUSD CAN TELL US ABOUT THE US STOCK MARKET
Updated
As you can see, it looks as we are preparing for a correction in EURUSD (So as of now, I am short. However I fully expect a possibility of a range). What does being short tell us?
It means in the near future (weeks-months because this is a daily chart) the USD could gain some value to its Euro counterpart. How would the USD gain its value? A great way would be if interest rates are hiked by the FED, giving the USD more attraction to foreign currency investors. This rate spike would counter inflation but we all know what a rate hike would do to the economy- slowwwww down. This would in turn go along with what we have been discussing in the markets lately as the SPX and DJX have been facing.
It is a huge stretch and this should really be interpreted as a EURUSD trade- but- it could mean a stronger dollar in the future CAUSED by higher interest rates- slowing the economy and stock market growth.
It means in the near future (weeks-months because this is a daily chart) the USD could gain some value to its Euro counterpart. How would the USD gain its value? A great way would be if interest rates are hiked by the FED, giving the USD more attraction to foreign currency investors. This rate spike would counter inflation but we all know what a rate hike would do to the economy- slowwwww down. This would in turn go along with what we have been discussing in the markets lately as the SPX and DJX have been facing.
It is a huge stretch and this should really be interpreted as a EURUSD trade- but- it could mean a stronger dollar in the future CAUSED by higher interest rates- slowing the economy and stock market growth.
Note
We seem to be following the range! (Grey dotted lines)Trade closed manually
UPDATED EURUSD CHART ON MY PAGE. We definitely went with the range. See my new chart on my profile for an update on the pair.Trade closed: target reached
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