Euro to Swing higher in 2022

Currency swings up and down, it looks like the EURUSD is about to swing up.


Hows that?

The recent US FOMC meeting confused many folks, some say it was the most hawkish or most dovish they have heard. In the end the US dollar screamed higher, the hawks won on the day. Yet the days after FED officials are talking down the hawkish effect of the Jan FOMC press conference. 

Some tweets:

FED Governor already easing fears of 6 or 7 rate hike nonsense!

@Hedgeye
KASHKARI: PAUSE IN RATE HIKES IN THE SPRING IS POSSIBLE (April/May)

Yep, one, done, cut. Kashkari wins the award for best Fed Governor. Who would've thought.


@BreakingLive_
FED'S KASHKARI: THE LONG END OF THE YIELD CURVE INDICATES THAT WE ARE LIKELY TO ENTER A PERIOD OF LOWER INFLATION AND GROWTH.

The US FED members jawboning will continue, mostly on political lines. The news to watch this week is European inflation and it is getting hot, mostly due to energy costs screaming higher (natural gas) and it is not going to stop during the European winter. Higher inflation in Europe with sinking US inflation is not priced into the EURUSD, therefore a swing higher is on the table.

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Bitcoin Swings Down to Support

Come on! Seriously do you think a 400% rally for Bitcoin was going to be given to the public easily. Without any pain! Come on muppets!


The uniformed (public) buy when price is rising or breaking new highs, the informed buy when price is falling or breaking lows.

The informed have to do it this way as they are large volume players and the only way they can buy large volume is to create chaos. The chaos brings to the market the weak holders and a forced sell. Price is moved to where the volume can be accumulated, in a bull trend that is down to critical support.

Of course if price is in a true bull market the 'chaos' created should not break critical long term trend signals, the short and intermediate term signals are fair game. The next few weeks will confirm or deny the large players position on the trend of this market, bull or bear. Time will tell. 

It is very typical that these price support tests are around option expiration (Jan 21/28) and FED FOMC decisions (Jan 26), just enough chaos to get the desired response from policy makers. 


Chart BTC with ETH

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Date Found: Saturday, 18 December 2021, 04:43:56 PM

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Date Found: Sunday, 09 January 2022, 05:07:37 AM

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Date Found: Sunday, 09 January 2022, 05:08:58 AM

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Date Found: Monday, 10 January 2022, 04:59:35 AM

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US Dollar Short Term Cycle Peak Near - Update

The short term US Dollar cycle peak is upon us, it is time for capital flows to rule the direction of the DXY.


Previous Post: US Dollar Short Term Cycle Peak Near

Capital flows and interest rate differentials move currency around.

If capital flows take over, then they DXY is going into the 80's at least. Of course hiking rates 4 times is easier on the world when the DXY is near 80 rather than 95. A lot if US debt held by emerging markets is at risk otherwise. And yes a lower US dollar in early 2022 helps China out, as it supports world demand, and in late 2022 Chinese stimulus is expected. Nice!

The US dollar cycle is rolling over in the short term.

Some people do not want the US dollar to fall as it has been great to be long the US Dollar trades. JP Morgan Jamie Dimon says he could see 6 to 7 rate hikes in 2022. Of course silver shorts unwinding will not be great for the Bank of America and/or JP Morgan. There are too many open trades requiring the US dollar to stay trending higher. Oops, looks like a leadership change is about to occur in 2022. 


This sector is worth watching.

2022 is going to be fun!




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