Short

EURUSD The bigger picture: Born into a 25 years flat correction?

Updated

This idea looks at EURUSD as born into a 25 years Grand Super Cycle Flat, originating at the Euro's release as a real currency with a 5 waves Super cycle as wave A, and now correcting this motive wave in B with a so called Complex Combination (WXY). The talk of parity has been on the table several times, just to die out, because most of market commenting is short sited in scope, but I think we are now approaching that phase of the pairs existence. In my view, the Euro simply has to get back to parity, and lower, to survive in it's current form, to restore the zones internal competitive balance. It's either that or "braking the back of the Camel" so to speak, which means that either it will transform into a 2-tiers currency (how now that will be done or look like) or some countries will be forced out one way or the other. As usual in nature, the path of least resistance will win out and that in my view means parity and below , then a rebuild from there. Of course, this is just one idea that can be spun out of the last 20 years price action, and as always, the future path of price is never kept hostage by the past. So as with all EW counts (or other types of projections), this can only be probability at best.

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.

viking-EW

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