ridethepig | When will EURUSD find a bottom?A good time to kickstart a round of chart updates here...the underlying infrastructure in Europe will be fixed, from a monetary perspective eurobonds will be the only way to save the currency and covid-19 has unlocked Germany one more time. Although we are starting to clear the top of the curve in places like Italy and NY to a lot lesser extent, there is (sadly) a lot of damage to recover in the 'fact' leg across earnings and macro numbers.
The dark clouds are still prevalent across Europe, until Germany bend the knee it will be difficult to grab euros with both hands. Instead a further flush of the lows is in play, in my books it will be enough to trigger capitulation and remain in this strategy. For those tracking the examples in DAX we traded the highs earlier in the year, there is marginal room for another leg lower via risk:
I am starting to turn neutral there and continue to monitor the situation with an ear to the ground. USD will remain in bid until we clear the risk/panic flows in Coronavirus. For those tracking the short-term technical side in EURUSD for the long-term map we have 1.07xx handle acting as strong support, I expect a breach to trigger the political capitulation which is what we are tracking on the fundamental side . Once we clear the , to the topside a breach of 1.089xx will open up the targets above. These macro swing targets will come into play at 1.18xx, 1.25xx and 1.35xx over the coming Months and Quarters.
The courage to intentionally let oneself be put under pressure for days, just on account of a remote possibility, is now rewarded. Buyers will obtain a direct attack by letting the lows go, do not rush into this move as it is one to track for the rest of the year and potentially decade. Pips are for pipsqueak’s ... this is a fundamental swing which consists of setting our opponent a difficult problem.
You can see the stakes are being raised; buyers are taking their time developing the cramped floor. And yet, sellers have not yet passed the point of no return at parity, after which it becomes impossible to level the playing field. A very difficult macro concept to understand, jump into the comments with any questions, comments and views!
