The perfect bearish storm has been created with European stocks wobbling, the FTSE 100 hovering just above 6000, Yen and USD strengthening and EM currencies weakening, noted Paul Rodriguez, from ThinkTrading.com, when he joined Zak Mir and Charlie Gibson on the Tip TV Finance Show.
Key Points:
Rodriguez highlighted the viscous circle of people looking for yield, which began with money flooding into emerging markets, which isn’t a long-term proposition and he believed there are huge moves likely to come in the forex market.
The market will correct, urged Rodriguez, but the question is over how quickly and the strength of the snap back.
He continued that Apple’s share price seems to be topping out, which may be used as a barometer for the US economic position. When questioned over QE in the US, Rodriguez commented that we are likely to see QE 4 in the country.
In the short-term, Rodriguez expected gold to bounce, on the back of a minor inverse head and shoulders pattern, before heading back down. He added that if it breaks the $1050 level, we could see downside towards $750 on the yellow metal.
Watch the video for further analysis on the global macro situation, as well as views on the South African Rand, the Renminbi and the Rouble.
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