Hi Viper boys and girls,
Sorry been a bit of a gap but I have been sunning myself in Lanzarote.
While I have been away and even back a few days, the market has seen a move lower in EUR/USD on Draghi comments then no follow up with action so has bounced back.
I repeat what I said last time, he will have to provide action to maintain credibility and most likely in the form of some type of QE like the States and Japan have done already. This is the proven way to lower the value of a currency and will benefit the whole European region.
What does this mean for you and I ? Well until he does the Euro will be supported and at present is unable to fall below 1.3700 and this could lead to a move towards 1.4000 if he is not careful. For me that means I am not going long Euros in the anaconda but am prepared to do so on Rattlers and cobras.
The stockmarket globally would welcome such a move from the ECB as it looks towards the FED ending QE this year and not sure if the Japanese will increase their version. This means there is going to be continued volatility in the Equity markets and where you may want to focus your anaconda trades.
I believe that this next wave of money printing by the ECB will happen and give the stockmarket one last large shot in the arm and take the S&P 500 past 1900 and new highs near 1950 that will then be seen as the top.
So keep an eye on currencies with an eye to the stockmarket and “risk on” or “risk off ” trades accordingly. Remember stock market going up US/JPY usually follows and vice versa, conversely the Aussie usually likes a strong equity market and vice versa.
Regarding the stockmarket look for pullbacks to buy as the recent move down from 1890 to 1815 on the S&P 500 has shown but don’t get greedy and trade size properly as you now can with the change of microlots value on the equity markets on your trading platform.
Keep your eyes open for Draghi and his ECB chums talking at 1.3900 EUR/USD or near and some action to be taken at the next ECB meeting on May 8th.
I expect more of the same in the next week or 2 and oh yes one last point, I believe the Aussie is overvalued and having peaked at 0.9400 against the USD looking to short this against the USD and GBP when the set ups are in place.
See you soon