Nothing To See Here
A funny thing happened this morning over at the ECB this morning. Mario Draghi must have finally found a moment to actually look at a EUR/USD chart as the ECB suddenly seems concerned about the implications of a 11% hike over the course of the past six months. Which to me stands in rather stark contrast with several constitutional trains wreck that are currently unfolding all across in Europe and most pressingly the one right now here in Spain. Not exactly bullish when Moody’s and other rating agencies are issuing recurring warnings about Spanish and Catalonian credit ratings.
Of course the Euro vigilantes won’t have any of it and if you expected a massive drop in the EUR/USD this morning then you are probably feeling pretty disappointed right now as it has barely budged. I think Draghi and the rest of the ECB may just have a deflationary problem on their hands. After haplessly having ignored a relentless and largely undeserved rally in the Euro over the past six months the complete lack of a response (even a limp-wristed one) will without doubt come at a price once the ECB is presented with Q3 and Q4 economic reports sometime next year.
However it’s quite possible that I’m greatly underestimating the man and that this is just a sneaky way of getting back at Wolfgang Schäuble who has been giving him nothing but grieve all through his tenure. Germany wants open borders, windmills and solar instead of fossil or nuclear energy, a ban on all internal combustion engines by 2030 (no joke), and of course a strong currency. And here at Evil Speculator we strongly adhere to the rule that when your opponent is digging a hole – don’t take away his shovel
Anyway, the USD is actually starting to look bullish now. If it can hold its 100-hour SMA then it may have a shot at visiting its 100-day near 94. However, it’s still early days here and a little shake out at this stage would not be unusual.
Our E-Mini campaign is starting to pay off in spates and as it’s approaching an MFE of 3R I’m moving my stop to just below 2530. In retrospect that inverse H&S I suspected last week seems to have launched yet another short squeeze from hell. Great fun being able to ride it up all the way… I hope some of you guys are with me in this one.
Soybeans has done absolutely zilch but I’m holding it as I still like the formation on the daily panel. Should that diagonal be breached then we are probably looking at yet another correction lower. Which would suck now but turn into a great long opportunity at the onset of a bounce.
The gift that keeps on giving – a.k.a. the USD/CAD. What can I say – we’ve been playing this one like a fiddle and our trailing stop once again advances, this time to just below 1.245. I intent to ride this puppy all the way!
Gold is a long entry for me here but I’m only risking 0.3R with a stop below 1266. A odds for a bounce here are within coin toss margins and the only reason I’m interested is that things usually unfold very directionally once momentum kicks in.
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