Trading must be fun . Now in this situation , purely on trading perspective is too risky. It will very likely range . I'm certainly wrong but this is my opinion.
Therefore , unless a certain level down in DXC will be reached , we skip this Euro's science fictions levels. Focus is on JY and Cable , both vs USD & EUro.
In the meanwhile this would likely be the next move of Euro.
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USD NEVER closed really below 81.40.
Conswwequently has been supported and the dangerous slide did not create major damages (???) . As explained a firm set below 81.50 would have pushed Euro and correlated commodities to strange levels, economically impossible to sustain -Macrowise for US funds inflow outflow -
A glance to 30 dd Fed Fund and to Longer duration Notes + bonds could give you the answer.
Ot was just a nice manner to properly begin the fsecond quarter with hefty gains.
A simple outlook.
It is south biased and it is a very personal opinion.
Macrowise a little reflection:
- Europe central bank policy counts less than zero. Federal Reserve bright guys know this .They do know that THEY have and will always have to play the #1 role , the ball is on their field .
- Very simplified the only concern is -from fed side- : curb the huge streams of funds translating from greenback to the (fake) Euro currency.
- Fedreral reserve is facing since 2006 a nice (for the holders) situation with high yields on the very short duration high and higher than long durations (inverted curve).
- Who is equilibrating their treasury portfolio (always simplifing) switching into USD? The only countries with a large cash surplus: far est fast growing countries, namely China.So very simplifiyng, how much part is deriving from previous currency stock alignement, how much from new trend and how much from pure simple wonder full speculation...? Data they say it but turns long -and boring for you- to follow it.
- Unfortunately the spread among Tnote and Bund is getting narrow.And this does not favour the USD.
- On the other side EU productive system cannot face two big enemies at the time: China (+ a cheating reminby) and Euro at 1.37 -1.35. The first is killling the local manufacturers value chain and /or positioning and the inner demand of EU manufactured goods , the latter is killing the exports
Words aside , the charts and the auction development is triyng to tell us something.
IN PLAIN OPERATIVE WORDS:
Any correction SOUTH of more than 500 pips from the LAST MAJOR DEGREE HIGH RELEVANT swing tells you that the trend is very likely changed south.