Hey Team.
Mike here.
Ok. Look. After completing all my analysis, I’ve realized something. Pretty massive. (I know your all probably saying…ok Mike, what are you gonna predict now?)
On the contrary, I have some facts. We are now at the premise of a massive divergence. Yesterday I shot out to you about the USD. They have momentum going now. They have come back from a month long correction. A big retracement, in which we all kept asking the question if it’s (trend) finally over. And I am convicted now, because of NFP Friday, that this is just the beginning of a new leg of the trend (across the board).
[B]AND[/B]…I have now found another confirmation about that… Are you all sitting down??
[B]THERE IS A HUGE DIVERGENCE PRESENT NOW[/B]-----And that my friends has to do with the [B]EUR[/B].
I have seen the numbers, and trends. The EUR has dropped on the long term (M), medium term (W) and short term (D) trends, across the board. Every last one is a down arrow on my tables. Except against the CHF on the short term (which is trending high). Just take a look on the charts for yourselves. I also have the USD as trending high across the board, all three groups, except against the NZD for short term, which is ranging. But that is just at the tipping point now.
This past week the EUR, against the AUD, has BROKEN the monthly, weekly, and daily support levels!
Against the JPY they are presently at the weekly support level.
Against the CAD they have broken both the weekly, and daily support level.
Then I got to thinking…as the USD has been retracing lower, at the same time the EUR HAS BEEN RETRACING ALSO, but higher. And now it’s all coming back around to this point. This point being where on a chart you will see something trending high, it turns back down, then rises again up to the last high point, then takes on another leg up. (Trending 101)
We are at that point now. Across the board. WITH BOTH OF THEM. It’s a divergence.
I just haven’t seen something like this before. It just seems so clear.
I’m very excited about this. This week coming up will just be huge. It will tell me whether I’m right, and seeing this in the proper perspective. Or once again, dead wrong. And maybe the timing is off.
But…FE…I’m talking about the already strong currency. Not the Pound anymore. Not someone off into left field. The USD. The most talked about currency.
The only thing I’m a little leery about is the Major/Comm relationship about it. Cause we’re talking about 2 Majors. And I don’t particularly know where they fit in with it all. (Well not yet anyway) I have noticed that the JPY has gotten stronger this past week. In fact, they have tailed the USD much lately. Against the Comms, the Yen has come up in the trend determination to the AUD, and the NZD. But not the CAD. CAD has been holding up just fine lately. Maybe because of tailing the USD also. But you guys should know that the NZD has dropped off much. And is the weakest (short term) Comm now.
I wonder if the USD does flex it’s muscle enough, will that have so much of the opposite effect on the AUD.
Will this massive divergence affect the Comms also? (will be watching)
Oh…and another thing I have been thinking about is this. And there’s not enough hours in a day for me to be digging into the intermarket analysis (although I’m trying). But, can someone tell me what the bonds are doing? Have the 10 yr Tbills moving much? And how about the divergence between the USD bonds, and the EUR bonds? I know that there’s something there that the big players look at. I have been reading up on that some. The T bills are the ‘safe’ money. And when there’s a rush towards that, then there’s more of a risk off. Playing it more conservatively. So when the price of the ‘bills’ goes up, the yields go down, and that must mean it’s not good for the value of the dollar. So when the price of the ‘bills’ goes down, the yields go up, then that must mean it’s good for the value of the dollar. (I don’t know for sure if that’s all correct, I was just thinking out loud. Please correct me if I’m wrong, Peter!)
So, given that logic, I wonder if the yields are going up, for the USD. And the yields of the Bunds are going down. Divergence in the Bond markets. That would be another confirmation of the movements of the USD, and EUR.
So guys…talk to me…what do you all think?
I haven’t looked at the calendar yet to see what’s on tap for this week.
Oh, and another thing. Please tell me someone is just raking it in with the CHF! Just look at all the trends against them. It’s pretty clear. Will I be bold enough to say that everyone will just pick up where they left off before the bomb hit??? …ahh…NO. But I am thinking it! Well, surely maybe the USD will. They are so dog gone close now. If you look at history, USD/CHF, the last time a major hit by the CHF, it all came back up, and even more. It’s just looks like the effect of a hanging man candlestick (or something like that).
Mike