EURUSD 1.1851 |
USDJPY 111.52 |
GBPUSD 1.3772 |
AUDUSD 0.7485 |
USDCAD 1.2406 |
GBPJPY 153.59 |
EURJPY 132.15 |
AUDJPY 83.48 |
CADJPY 89.86 |
Silver 26.23 |
How to improve your decision--makingh between Nasdaq100 and SPX by watching technicals in bond yields - Details in video description.
Bitcoin versus Miners Performance
As many of you know 2023 was kind to members of our WhatsApp Broadcast Group who snapped up shares in bitcoin miners, while 2024 has so far been more superior to Bitcoin than most of the miners...
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So the Euro is knocking its head once again against the 1.4 ceiling. But will it finally break through?
Portugal downgraded by Moody's, should it matter given the downgrades to Spain last week were largely shaken off by the rising Euro? And it can hardly be a surprise, but how much of Portugal's problems have already been priced in?
I'm not sure on the above, advice welcome, but I do think the markets may have got ahead of themselves in believing Trichet's hawkish talk. The old Machiavel's inflation-bashing bravado was in my opinion a pragmatic attempt to boost the Euro upwards (it has worked), in the anticipation of Euro periphery problems. Add in Japan's recent woes, and a sell off in commodities, and I think the stage is set for an about turn. I'm also recalling Trichet's claim that there could be no successive raising of rates because it would effectively blow up the banking system: so the question has to be, why raise them at all?
Place yer bets...
I agree the general trend for euro looks upwards, taking into account the weekly close. But we now know that as soon as the eurozone crisis resurfaces, all those gains reverse very quickly. So the next time it hits, I will be doubling my short.
But the question for me is: is the above analysis now redundant, given all the efforts that have been put in to preventing another eurozone crisis? Undoubtedly the EU's response has been impressive, not least because all the EU leaders will do anything to save their euro-centred careers, so they now know how to respond, but even taking this into consideration the euro is historically well above its average versus the USD.
And then there is the US dollar, which the FED seems to want to inflate out of existence to cut down US debts. I think there is something of a fiscal conservative revival underway in the US, which will intensify this year in preparation for US elections. That could pave the way for the end of the dollar-dumping of the Greenspan and Bernanke eras.
So when I look at the political economic situation, and the historically high value of the euro, I still fall on the short euro side; and the fact that the eurozone could blow up again gives me extra support on this.
As a final, technical point, I note that even though the euro has risen since January, it has not shown the same upward momentum that usually accompanies its rallies - the retracements are a significant sign that institutional investors are wary of piling into the currency, which I believe caps it off for now at 1.40.
Place yer bets...
Many commentators are saying Japan will recover, and ten years ago that would be true, but this is a very old (as in demographics) country, and unless it introduces massive reforms, not least on immigration, then it is guaranteed another rough decade.
Back in Euroland, with the return of the warmer weather expect to see a rerun of last year's riots in Greece, with a surge again in Portugese bonds.
In other words, if you are short euro dollar patience will be rewarded!:-