Forex FOREX PRO WEEKLY, December 04 - 08, 2023

Sive Morten

Special Consultant to the FPA
Messages
18,438
Guys, we have temporal problems with charts and pics uploading, so I put them by links in cloud storage. They are available to see and download.

Fundamentals


While we see how sparkling political life is, the economy background is boring at the same degree. Formally we've got few numbers that supposedly should have had to be important, but they did not, making no impact on the markets. Still, currently some obvious divergences appear in the US statistics that should investors become cautious.

Market overview

The dollar climbed from more than three-month lows on Wednesday after data showing the U.S. economy grew faster in the third quarter than initially reported helped investors consolidate positions following four days of losses. The greenback rose against the euro and an index of six major peers, but remained on track to post its biggest monthly decline since November 2022 on growing expectations the Federal Reserve will cut interest rates in the first half of 2024.

The dollar rose on news that U.S. gross domestic product increased at a 5.2% annualized rate in the last quarter, faster than the previously reported 4.9%. It was the fastest expansion since the fourth quarter of 2021, the U.S. Commerce Department said in its second estimate of third-quarter GDP. Following the GDP data, futures increased bets of a rate cut starting in March to almost a 50% chance of easing, compared with nearly 35% late on Tuesday, the CME Group's Fed Watch tool showed.

Now The market's fixation on inflation will likely shift to labor data as the degree of the economic slowdown takes precedence over the pace of decelerating prices.
he data will have to walk a fine line to satisfy the so-called Goldilocks narrative of cooling inflation and resilient growth that has boosted asset prices. Too strong a number would undercut bets that the Fed will begin easing monetary policy sooner than expected, presenting an obstacle to the searing fourth quarter rally in stocks and bonds.

A weak number, on the other hand, could spark fears that the economy is beginning to roll over following 525 basis points of rate increases, potentially dulling risk appetite. Economists polled by Reuters expect the U.S. economy to have added 175,000 jobs in November, versus 150,000 in October.

NFP Next week expectations chart
Thursday's economic data suggested that the Federal Reserve is likely done raising interest rates and may start easing by the middle of next year, typically a dollar-negative factor. Euro weakness after a soft euro zone inflation report also partly helped boost the greenback, analysts said. Some analysts said the dollar may have benefited from month-end demand, as investors squared up positions for November, a period that featured a sharp sell-off in the U.S. currency with the market pricing in rate cuts next year. Others, however, expected a dollar sell-off at month-end with stocks' sharp gains for November. There were sell dollar signals at some of the biggest U.S. banks, analysts said.

"We were expecting dollar selling at month-end given how much U.S. equities rallied. That typically means foreign asset managers would have sold dollars forward," said Vassili Serebriakov, FX strategist, at UBS in New York. But it's possible that some of the selling happened earlier in the month. So maybe there's less dollar selling at month end. The broader picture is that the dollar has weakened quite substantially in November. It's still probably a two-way risk from here in terms of the Fed December meeting," Serebriakov of UBS said. The U.S. data hasn't slowed significantly. Inflation has but activity data remains relatively resilient," he added.

Inflation as measured by the personal consumption expenditures (PCE) price index was unchanged in October after climbing 0.4% in September. In the 12 months through October, the PCE price index increased 3.0%. That was the smallest year-on-year gain since March 2021 and followed a 3.4% advance in September. Meanwhile, initial claims for state unemployment benefits increased 7,000 to a seasonally-adjusted 218,000 for the week ended Nov. 25. Economists had forecast 226,000 claims.

In other currencies, the euro fell after euro zone inflation eased by more than forecast this month, fuelling bets of early European Central Bank rate cuts. Consumer price growth in the 20 countries that share the euro currency dropped to 2.4% in November from 2.9% in October, well below expectations for a fall to 2.7%.

Federal Reserve Chair Jerome Powell struck a cautious tone on further interest rate moves, saying that the risk of under- or over-tightening is now more balanced.
The market viewed his comments as dovish, with investors pricing in expectations that the Fed is likely done raising rates. Powell said it was clear that U.S. monetary policy was slowing the economy as expected, with a benchmark overnight interest rate "well into restrictive territory." Powell noted, however, that the Fed is prepared to tighten policy further if deemed appropriate.

Powell's remarks came after data showed the U.S. manufacturing sector remained weak in November, affirming his comments that Fed rate hikes have started to slow the economy. The Institute for Supply Management (ISM) said its manufacturing PMI was unchanged at 46.7 last month. It was the 13th consecutive month that the PMI stayed below 50, which indicates contraction in manufacturing.

"Powell just gave the thumbs up to the other side of the camp believing that the Fed has acted correctly and can afford to wait-and-see without (hiking), but not necessarily cutting," said Juan Perez, director of trading at Monex USA in Washington.

Goldman Sachs on Friday said it expected the European Central Bank to deliver its first rate cut in the second quarter of 2024, compared to a previous forecast of a cut in the third quarter. Mixed economic data across Europe failed to set the tone for the euro, with a survey showing a downturn in euro zone manufacturing activity eased slightly last month but remained deeply in the red.

The Federal Reserve will cut rates more aggressively than markets are currently pricing in as a mild U.S. recession arrives in the first half of next year, economists at Deutsche Bank projected on Monday. In an outlook report, the Deutsche Bank economists projected 175 basis points in rate cuts in 2024. With the Fed rate currently at 5.25%-5.5%, that would reduce the rate to 3.5%-3.75% by the end of the year.

Deutsche Bank expects two quarters of negative economic growth in the first half of 2024, which leads to a "pretty sharp rise" in the unemployment rate to 4.6% by the middle of next year from 3.9% now, said Brett Ryan, the bank's senior U.S. economist, in an interview with Reuters.

“We see the economy hitting a soft patch in the first half of the year that results in a more aggressive cutting profile starting in mid year,” he said. At the same time, the bank expects that the economic weakness "eases inflationary pressures," Ryan said.

In the report released on Monday, the bank said it expected a "mild recession" in the first half of 2024. DB expects an initial cut of 50 basis points at the Fed's June 2024 meeting, followed by 125 bps of additional cuts over the rest of the year.

Fed members opinions are also stands different. Here you could read statements by C. Waller, L. Mester, and M. Bowman
US DOLLAR FORECASTS
So, this is real mess stand around expectations of next Fed step. Investors are rush to bet on first rate cut, and start making forecasts one braver another. The rise in U.S. rate cut expectations for next year seems to have prompted hedge funds to cool their optimism on the dollar, potentially weakening a key plank of support for the currency in the coming months.

The latest Commodity Futures Trading Commission (CFTC) data shows that funds cut their net long dollar position against a range of major and emerging currencies to $4.5 billion in the week ending Nov. 14 from $10 billion the week before. The $5.5 billion week-on-week swing is the biggest since July and second largest this year, and comes as interest rate futures markets had moved to price in up to 100 basis points of Fed rate cuts by the end of next year.

Funds expanded their net long euro position by $2.9 billion, or nearly 21,000 contracts, the sixth increase in a row and the biggest since July. That position is now worth nearly $18 billion, the most in three months and well up from $11 billion only two weeks ago.

Five funds shared their views on the fate of the dollar:
AQR CAPITAL MANAGEMENT (AUM $95 Bln)
Key trade: Long dollar, short Swiss franc


Managing director Jonathan Fader believes that an end to U.S. rate hikes does not necessarily imply dollar weakness. Over the last 40 years, the dollar has tended to average steady or a bit stronger in the months following a final hike, says Fader, who is "constructive" on the currency. Fader believes the best way to capitalise on ongoing dollar strength would be to buy the greenback against currencies exposed to negative price trends, weaker economic fundamentals and dovish monetary policy, such as the Swiss franc.

Dollar performance around first rate cut chart

FLORIN COURT CAPITAL (AUM $1.8Bln) Doug Greenig, Florin Court's chief investment and executive officer, reckons the dollar will slowly decline as geopolitical tensions disperse power to different parts of the world. He expects the U.S. economy to slow sharply which, alongside falling inflation, will likely hurt the dollar against some emerging market currencies.

Meantime, U.S. banks reported Wednesday a slowdown in profits in the third quarter of the year, as lower noninterest income and higher realized losses on bank investments took a toll. The U.S. Federal Deposit Insurance Corporation reported bank profits at $68.4 billion in the most recent quarter, down 3.4% from the prior quarter. Year over year, bank profits were down 4.6%, due in large part to banks setting aside more funds in provision expenses for potential loan losses, which were up 33.2% in the last four quarters.

While the Federal Reserve will need nearly four more years to cover a historic operating loss and start sending profits again to the U.S. Treasury, according to new research from the Federal Reserve Bank of St. Louis. Some private sector analysts see the net loss peaking in the $150 billion to $200 billion range, possibly hitting that mark in 2025. Earlier this year, the New York Fed estimated the central bank would return to profitability in 2025, which would allow it to start paying down the deferred asset.

Fed operation loss chart
EU MEETS NOT BETTER CONDITIONS

First political turmoil in Spain and Portugal and now upheaval in Germany and the Netherlands heralds fresh uncertainty ahead of a jam-packed 2024 election year.
After November's constitutional court blow, Germany faces a 17 billion-euro ($18.54 billion) hole in next year's budget. No date has been set for the budget, so news from Berlin remains in focus and a fiscal correction means the economy is at risk of shrinking for a second straight year. And coalition talks are stumbling in the Netherlands after far-right, anti-EU Geert Wilders's shock election win. Turmoil in two EU heavyweights is unwelcome just as the bloc seeks more cash from members and finance ministers meet to iron out new fiscal rules on Friday.

Bank lending to businesses across the euro zone fell for the first time since 2015 last month, data from the European Central Bank (ECB) showed on Tuesday, as growth faltered with little prospect for a meaningful recovery. Banks have already turned to cost cuts to try to weather the downturn, which in a people-intensive business means job losses.

In General we already pointed massive drop in consumption across the EU, including major economies, such as France and Germany that are officially stand in recession. And drop of EU inflation in current situation is just a sign of economy slowdown, which is not positive. With this background DAX rally looks absolutely crazy: Here are few charts, updating PMI, consumption and unemployment numbers of structural crisis:

Structural crisis updating charts
WHAT"S WRONG WITH THE US DATA?

So, the US GDP shows "Chinese" growth pace, above 5%, which seems phenomenal for current situation and record high interest rates. In one of our previous reports we already pointed on some inconsistencies of different indicators. Mostly it relates to growth level, continues claims and working hours. With healthy growing economy, continues claims can't constantly raise while weekly hours should not dropping right? This is just simple logic and common sense. But, the US statistics agencies do not hesitate to public this crap. And what is even more outstanding - investors take it as the truth of last resort.

Today we show you another fact that makes us to have big doubts on the reality of recent GDP data. This is tax gathering pace. The US budget deficit soared in 2023. It is almost doubled. It increased from 3.9% of GDP in FY 2022 to 7.5% in 2023 (inc.student loan forgiveness program). The reason for the growing deficit is the fall in budget revenues (in other words, tax collection). Expenses remained at the same level. "The Treasury is emptying, my lord." It's time to start saving. Adjusted for inflation, the United States has generally been sitting on falling tax revenues for 1.5 years.

Here is a table showing US federal tax collections by quarter:

Taxes gathering sheet

As you can see, after the peak of 2022 Q2, there is a relentless downward decline. If we add inflation here, we will get a drop in real tax collection by about 10%.
Despite all the miracles of GDP growth from American statisticians, the treasury has been earning less and less money for 1.5 years in a row. This is a vivid illustration of the same “inflated US GDP” that various kinds of marginal economists talk about.

The fact is that a huge portion of federal taxes is a percentage of stock market growth. If the stock market doesn't rise, then there are no taxes. At the beginning of 2022, the tax harvest was collected for the abnormal 2021 from the point of view of the bubble. Let me remind you that now both the SP500 and the Nasdaq, and the crypto are trading below their 2021 peak.

This is what creates a stalemate with saving money in the very near future. Biden would really like to speed up the market before the elections, but for this it is necessary to give relaxations on the monetary policy and, as a result, get a quick depreciation of the dollar and a new wave of inflation. So the guys went to cut expenses.

Returning back to GDP growth - could you explain me how could GDP show 5+% growth while tax gathering is constantly dropping?

Today, the US public debt is $33.7 trillion. The US national debt increases monthly by $604 billion per month, which is about $20 billion per day or $833 million every hour. If this trend continues (and now there is no reason to say that it will change), then by the end of next year the national debt will reach $41 trillion. Such an explosive growth in the money supply has already led to the fact that the United States is experiencing the strongest wave of real inflation in its entire history, and most importantly, the international bond market is beginning to slowly collapse in anticipation of an increase in unrealized losses.

Today, the international bond market is about $128 trillion , with the total volume of unrealized paper losses amounting to about 60% or $77 trillion
. Already, 20-year Treasuries have lost about 53% in price, and this happened in just three years. The American authorities are already preparing for the worst; after the last financial crisis, they introduced a special rule, according to which, in a crisis situation, banks can individually requisition private accounts over $250 thousand.

At the same time, in parallel with all this, the American authorities are already directly planning to drain the dollar and the entire global financial system along with it. This year they launched a new generation of payment systems - Fed now, which should become a new foundation for making payments and settlements. In parallel, they began to rapidly develop their CBDC, in an attempt to create an alternative to the fiat dollar over the next few years.

Some most radical analysts suggest that the next 2–3 years will be especially interesting. We will see the third world war, the collapse of the global financial system, and maybe even the collapse of NATO. There have never been such opportunities in the world; the main thing is not to miss the moment and survive the approaching storm....
 
But, in general, the problem is not that someone really doesn’t want to buy American government debt, but the problem is that it has grown so much that everyone else simply doesn’t have the money to buy it all. In theory, the Fed should get involved, but it is either capricious, or bargaining, or is slowing down and waiting for the Treasury to suck all the liquidity out of the system.

What exactly can fellow Americans do in this situation? Let's start with the fact that the entire growth of their GDP in 2021, naturally, was inflated due to the unprecedented dollar emission in 2020-2021. Then came the inflationary reckoning and the tightening of the screws by the Fed. This helped partly. The inflationary impulse was temporarily muted (but not defeated). Plus they supported their GDP by plundering Europe.

But they paid for it with a wild acceleration of the budget deficit and the cost of debt servicing. And then that's it. There are no more tricks left. You can’t trash Europe too much either. Cutting off 3% of Germany's GDP is normal, but 20% is not normal at all. Liver sausages must remain combat-ready.

We have to start saving or, as a last resort, suddenly win some kind of major geopolitical victory: over Putin, China, Iran, Venezuela, OPEC+. At least one from this list.

And without victories you will have to put up with it and save money. But in 3 years we have already realized that Biden is not capable of any geopolitical victories unless there are already US military bases there.

Still, the Dutch Empire, which Peter the Great admired, lost its leadership in the world 400 years ago, and yet the state still exists and lives relatively well. It’s just that the Americans will have to “move up” in terms of their desires for the world. World already saw examples of Vietnam and Afghanistan. For some reason, no one kicked Putin out of Syria, for example, and no one kicked out Assad. Everyone already considers this the “new normal.” You can include Crimea there too.

The same will probably happen with the new remnant of Ukraine, with Taiwan, Venezuela-Guyana, Iran, and so on. In addition to the territories, of course, we will have to move forward economically. Here and there the influence of American TNCs will be curtailed. And probably primarily oil and gas, chips, Tesla and IT. That's it. But this is relatively long-term perspective.

In short-term, it seems that somebody intentionally hides the truth, making the vision that everything is OK, no big problems at all. Either this is because of coming Presidence run year, or by some other reasons. Take a look that gold hits one record after another... and I do not like this bullish euphoria around Fed cut and stock market rally to almost irrational P/E ratios in IT companies that are driving the whole market. It seems that nobody looks any more at companies' statements. The inflation's defeat also looks doubtful. And before dollar starts dropping as a response on changing of geopolitical situation, it could raise on "safety run" when it becomes impossible to hide the reality. Meantime, it seems that the major driver for EUR/USD is a mutual ECB-Fed competition on who will cut rate first and investors' expectations around it. Recent EUR drop mostly stands due this factor. Poor recent France and Germany data pushed up expectations on earlier ECB dovish action, that has changed EUR/USD balance. It is also seemed to me that current EUR/USD rally looks fragile.

Technicals
Monthly


So, the major intrigue on market right now – is the action that we see the weekly B&B “Sell” starting point or not? For now, Friday’s dive looks promising.
Still monthly picture has not changed. Monthly trend remains bullish. Price shows healthy bounce up from YPP. It is few time until the end of the year, but, usually with such price action, market tends to YPR1 that stands around 1.1620 level. Besides, market still stands in wide downside range and YPR1 is precisely at its top line.

Here we could say that EUR should try to re-test K-area and trend line at least, around 1.1250-1.14 area. At the same time, speaking in very long-term perspective, this action could give us some "222" Sell pattern, where bearish trend could be re-established.

Monthly chart

Weekly

Here price action is not very impressive, but this always happens in the beginning of any move. Since we have bearish directional pattern – MACD doesn’t matter. On DXY weekly chart recent action looks like big hammer pattern up from weekly 5/8 support area.
EUR chart doesn’t have the hammer, but, it shows rising volatility as the range of this week covers the previous one. If we get any clues, they should appear on lower time frames.

Weekly chart

Daily
Once again, performance of DXY and EUR stands slightly different. But at least one thing we’ve got – downside reversal swing. EUR breaks the tendency of higher lows. On DXY we do not have it. MACD also turns bearish here.

Daily chart

Intraday
Here as we’ve said on Friday, we could get one of two patterns – either 3-Drive or H&S. Now, as we could see, with forming downside reversal swing all questions concerning 3-Drive are off the table. This makes task a bit more simple – we just need to wait for the right arm to be formed.

Overall shape of H&S looks nice, with proper downside acceleration on the slope of the head. 1.0945-1.0950 seems the level to watch for those who consider short entry.

4H Chart

On 1H chart market has completed another local AB-CD target. So, in the beginning of the week we intend to keep an eye on EUR upside bounce and what will happen around 1.0950 area, whether it will be possible to sell there.

1H Chart
 
But, in general, the problem is not that someone really doesn’t want to buy American government debt, but the problem is that it has grown so much that everyone else simply doesn’t have the money to buy it all. In theory, the Fed should get involved, but it is either capricious, or bargaining, or is slowing down and waiting for the Treasury to suck all the liquidity out of the system.

What exactly can fellow Americans do in this situation? Let's start with the fact that the entire growth of their GDP in 2021, naturally, was inflated due to the unprecedented dollar emission in 2020-2021. Then came the inflationary reckoning and the tightening of the screws by the Fed. This helped partly. The inflationary impulse was temporarily muted (but not defeated). Plus they supported their GDP by plundering Europe.

But they paid for it with a wild acceleration of the budget deficit and the cost of debt servicing. And then that's it. There are no more tricks left. You can’t trash Europe too much either. Cutting off 3% of Germany's GDP is normal, but 20% is not normal at all. Liver sausages must remain combat-ready.

We have to start saving or, as a last resort, suddenly win some kind of major geopolitical victory: over Putin, China, Iran, Venezuela, OPEC+. At least one from this list.

And without victories you will have to put up with it and save money. But in 3 years we have already realized that Biden is not capable of any geopolitical victories unless there are already US military bases there.

Still, the Dutch Empire, which Peter the Great admired, lost its leadership in the world 400 years ago, and yet the state still exists and lives relatively well. It’s just that the Americans will have to “move up” in terms of their desires for the world. World already saw examples of Vietnam and Afghanistan. For some reason, no one kicked Putin out of Syria, for example, and no one kicked out Assad. Everyone already considers this the “new normal.” You can include Crimea there too.

The same will probably happen with the new remnant of Ukraine, with Taiwan, Venezuela-Guyana, Iran, and so on. In addition to the territories, of course, we will have to move forward economically. Here and there the influence of American TNCs will be curtailed. And probably primarily oil and gas, chips, Tesla and IT. That's it. But this is relatively long-term perspective.

In short-term, it seems that somebody intentionally hides the truth, making the vision that everything is OK, no big problems at all. Either this is because of coming Presidence run year, or by some other reasons. Take a look that gold hits one record after another... and I do not like this bullish euphoria around Fed cut and stock market rally to almost irrational P/E ratios in IT companies that are driving the whole market. It seems that nobody looks any more at companies' statements. The inflation's defeat also looks doubtful. And before dollar starts dropping as a response on changing of geopolitical situation, it could raise on "safety run" when it becomes impossible to hide the reality. Meantime, it seems that the major driver for EUR/USD is a mutual ECB-Fed competition on who will cut rate first and investors' expectations around it. Recent EUR drop mostly stands due this factor. Poor recent France and Germany data pushed up expectations on earlier ECB dovish action, that has changed EUR/USD balance. It is also seemed to me that current EUR/USD rally looks fragile.

Technicals
Monthly


So, the major intrigue on market right now – is the action that we see the weekly B&B “Sell” starting point or not? For now, Friday’s dive looks promising.
Still monthly picture has not changed. Monthly trend remains bullish. Price shows healthy bounce up from YPP. It is few time until the end of the year, but, usually with such price action, market tends to YPR1 that stands around 1.1620 level. Besides, market still stands in wide downside range and YPR1 is precisely at its top line.

Here we could say that EUR should try to re-test K-area and trend line at least, around 1.1250-1.14 area. At the same time, speaking in very long-term perspective, this action could give us some "222" Sell pattern, where bearish trend could be re-established.

Monthly chart

Weekly

Here price action is not very impressive, but this always happens in the beginning of any move. Since we have bearish directional pattern – MACD doesn’t matter. On DXY weekly chart recent action looks like big hammer pattern up from weekly 5/8 support area.
EUR chart doesn’t have the hammer, but, it shows rising volatility as the range of this week covers the previous one. If we get any clues, they should appear on lower time frames.

Weekly chart

Daily
Once again, performance of DXY and EUR stands slightly different. But at least one thing we’ve got – downside reversal swing. EUR breaks the tendency of higher lows. On DXY we do not have it. MACD also turns bearish here.

Daily chart

Intraday
Here as we’ve said on Friday, we could get one of two patterns – either 3-Drive or H&S. Now, as we could see, with forming downside reversal swing all questions concerning 3-Drive are off the table. This makes task a bit more simple – we just need to wait for the right arm to be formed.

Overall shape of H&S looks nice, with proper downside acceleration on the slope of the head. 1.0945-1.0950 seems the level to watch for those who consider short entry.

4H Chart

On 1H chart market has completed another local AB-CD target. So, in the beginning of the week we intend to keep an eye on EUR upside bounce and what will happen around 1.0950 area, whether it will be possible to sell there.

1H Chart
Dear Sive
Thanks alot
 
Morning folks,

So, EUR has made downside action evident. Because last week it were just some hints that it should happen... We suggest that this is non-political action, because EUR is also dropping. Since GBP action strongly different from the one on the EUR, we suggest that current weakness could be by two reasons. First is - inner EU economical factors, second - investors review the major idea of fast rate cut from the Fed. Or maybe some other inner factors exist that we do not know but rumors leaked to the market. Whatever it is, current action perfectly fits our technical view - weekly B&B "Sell" stands in progress.

Now we've got bullish Stretch pattern on daily chart and do not consider new short position right now. Need to wait for some rally to sell:
eur_d_05_12_23.png


On 4H chart EUR hits ultimate butterfly downside target. We haven't got H&S yet, but it still could be formed if upside bounce will happen:
eur_4h_05_12_23.png


The bounce from OP target that we've discussed in weekend has not happened. XOP stands around 1.0775. Pullback could start from any point. Still, with major support on daily chart, it is more probable that XOP will stand untouched for awhile. In fact, we do not care about this issue, because all we need is pullback, no matter from what point it starts. Let's keep watching:
eur_1h_05_12_23.png
 
Morning everybody,

So, on daily chart we have no changes by far. EUR is stuck with Oversold + Fib support, making bullish "Stretch" pattern, which, in turn, suggests the pullback. By looking at other markets - they also do not contradict to idea of pullback. GBP shows very lazy downside action, which looks more like just AB-CD retracement, 10-year bonds come to OP target @4.15% while on DXY the reverse H&S is still possible, as it looks a bit different, compares to EUR.

EUR picture suggests no new shorts by far as we have bullish "Stretch" pattern. Market still stands at the same area of oversold and Fib level:
eur_d_06_12_23.png


On 4H chart, if pullback starts 1.0860 resistance is the first one that could be achieved. Here we also have 1.618 ultimate butterfly downside target. But other technical indicators overcome it and it seems that chances on pullback are greater than another downside action. Although it might be completed by some occasional spike on ADP report or later, on NFP numbers release:
eur_4h_06_12_23.png


On 1H chart XOP target that we've specified yesterday is done. This is another point in favor of pullback from current levels. It was done precisely by butterfly, as we thought.
eur_1h_06_12_23.png


So, as a bottom line - bears sit on the hands, waiting for rally to Sell. Bulls could consider only scalp positions on 30-min and lower time frames, depending on patterns that you intend to use.
 
Hi Sive, what is a good target to take profit on this down trend? I currently have 2 sell positions. Is 1.07329 50% ok or the 1.06657 68%?
 
Hi Sive, what is a good target to take profit on this down trend? I currently have 2 sell positions. Is 1.07329 50% ok or the 1.06657 68%?
If you possessed with weekly pattern, then 1.0665 theoretically is correct choice. But the problem is, that before market will reach it, some pullback could happen, since weekly is rather long-term time frame.

So, depending on your trading time frame. If you trade on weekly/daily basis - you could keep it and stay focused on 1.0665. If you trade on daily/intraday basis, so maybe it makes sense to book the result, at least partially and move stop to breakeven on the rest of the position... But this is just general recommendations.
 
Morning everybody,

So, EUR situation is not changing by far. This is not good place for taking new short position. Market still stands at oversold and Fib support area, but, at the same time, it just can't get started the bounce.

Although we see slowdown of the action and good background on DXY and bond market for the pullback. Thus, as we anyway can't get short by far, the optimal solution might be is just to wait for NFP. Because it could become the trigger for upside action, especially if numbers will be lower.
eur_d_07_12_23.png


Meantime, on intraday charts, market hits 1.618 ultimate butterfly target. Overall price action is slowing, MACD divergence has become steeper... Level that we consider for the bounce is still the same - 3/8 and previous lows for beginning... and then we will see.
eur_4h_07_12_23.png


On 1H chart market slips slightly under XOP, no bullish patterns for scalp position have been formed either. Here is, once again, bears should wait, bulls for scalp trading, have to watch for reversal patterns. H&S, for example, or something else... If bounce starts, this downside channel should be broken...
eur_1h_07_12_23.png
 
Morning everybody,

So, EUR finally starts showing some signs of the bounce. H&S on DXY also starts looking well. In general everything goes with the plan. The only thing that is out of our control is coming NFP... Based on recent ADP numbers, NFP could trigger another upside swing on intraday charts. That's why, despite that DXY drop has happened, it could still flirt around the low of right arm

eur_d_08_12_23.png


On 4H chart we have no surprises, just watching for 1.0850 area as we've suggested:
eur_4h_08_12_23.png


On 1H chart, EUR is forming something, that we could call bullish. Downside channel is broken, at least, and upside reversal swing is formed. Thus, maybe we have H&S... Its OP target around 1.0844 which is just 10 pips lower than Fib level on the chart above. XOP stands around 1.0883 - 50% Fib level.
eur_1h_08_12_23.png


BTW, on GBP we have very similar pattern, so if you like it more, you could trade it there. I'm about scalp traders. For bears - we wait for NFP report and 2nd upside level, hopefully to OP, or higher. Then consider 2nd chance for short entry of our weekly B&B "Sell" journey.
 
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