Brian Twomey
Brian's Investment
King Draghi's risk is a far overbought Money supply as he competes in the stimulative race to the top against the United States. Draghi and the ECB's higher interest and exchange rate is undesirable if Draghi rescinds the current money supply. To maintain the money supply and stimulus risks lower Wages, Lower GDP for the tradeoff in possible higher Inflation. The Current Account at 22 billion is near deficit and lower Brent prices may see the actual deficit appear.
Higher Inflation and Money supplies maintains a higher Stock market and a profit payoff to money market funds and banks but at the expense of higher Wages and GDP for the masses. The United States last time saw 3% GDP was Q2 2006, 11 years and running. Draghi risks the same predicament as his current position is weak. The sledge hammer stimulus policy now comes to a vital cross road.
The analytical question is what would the economic situation look like today if Draghi, Yellen and all central banks observed their 104 year job duty to add and subtract weekly money to the system rather than stimulus. My questions to Draghi is what gives you this stimulus right, what was the overall intended goals because the effects are failures. Central bankers were never seen in 104 years prior but post 2008, they propelled themselves to sit front and center.
EUR/USD. The tops today for overbought EUR are located at 1.1624,1.1594 and 1.1564. At least the ECB offered symmetry for today. Below comes 1.1465, 1.1457 and 1.1406 as the extreme bottom. Longer term shorts must break current 1.1212.
EUR/JPY. Its the longer term averages overbought in EUR/JPY as well as EUR/USD. The longer term must break line to see far lower in EUR/JPY is located at 126.,09. Realistically for today, the extreme bottom is located at 127.92 then the normal bottom at 128.49. To head higher, must breaks are located at 129.44, 129.70 and highest at 130.36. Much resistance remains built into the daily topside for EUR/JPY.
The overall strategy for both EUR/JPY and EUR/USD remains sell rallies rather than attempt overbought longs.
Trading currencies and other financial instruments carries a degree of loss and possible loss of entire investments. Please managed your own risks, stop loss, and margins requirements.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.