Forex

[Caseynotes]

Interesting, early bird Interbank has eurusd opening gaped down to around 1.13860

[Mercury]

Beginning of the end for Merkel?  Set up the EURO capitulation but not yet perhaps.

 https://www.bbc.co.uk/news/world-europe-46016377

[Caseynotes]

The Merkel news has been dripping through all day but confirmed now she won't run in 2021. Chief economist says the recent regional poor polling results won't make a difference once the dust has settled but he is wrong. It's hard enough to keep a coalition together when there are only 2 of you, but 4 or 5 different parties. Ha.

“Even if Merkel were to be replaced and/or if a new government were to take power in Berlin, with or without new elections, it would not make a major difference once the dust has settled,” Holger Schmieding, chief economist at Berenberg, said in a note. “Any conceivable coalition in Berlin would still be dominated by the mainstream parties CDU/CSU, SPD, Greens and the smaller Liberals.”

https://www.zerohedge.com/news/2018-10-29/merkel-step-down-cdu-leader-after-disastrous-election-results

[phillo]

are we there yet?   ( Well almost )

[Mercury]

Over night (well midnight really) breakouts across the board on USD pairs with EUR,GBP,AUD all breakout of key resistance zones and CAD retesting small Triangle after a breakout last night.  If we see this backed up with a rally away this morning this is very Bullish and the relief rally I have been seeking is on, finally!

AUD is particularly bullish having already made a significant turn last Friday and is approaching a Daily LT channel Upper tram-line.  A breakthrough here will surely seal the rally direction...

I'd like to see a new higher high on the 1 hour chart on CAD to be more confident on this pair but I believe this would be a long term direction confirmation rather than a retrace...

[Mercury]

To complete the USD picture, the DX (which for anyone not familiar with it is comprised of: EUR; GBP; YEN; CAD; CHF & Swedish Kroner, it is a bit arcane but a useful overall USD indicator, not tradeable in my view) looks to have completed a wave 1 up and is now set for an A-B-C retrace.  Likely candidates for completion are the Fib 62% and 76/78%, the latter of which would be a Flag breakout retest zone.

Of note I am predicting EURUSD (over 50% of the DX strength) to move in a single 1-5 wave.  This can only happen if other pairs in the DX have a dampening effect (i.e. move in the opposite direction).  USDJPY is in a rally phase aligned to stocks rally.  USDCAD is setting up for a long term rally (unconfirmed!). So this could easily be the case.  Alternatively there is an EW set up that allows for EUR to also make a wave C move in A-B-C fashion, called a complex retrace but let's see how the price action goes before assessing which it is.  One thing that is tweaking my antennae on this latter set up is that while I am expecting a period of EUR strength vs GBP I then expect EURGBP to dive into a strongly LT Bearish move, which could align to a EURUSD complex retrace.

All a bit complicated and technical so for right now I will just be happy if USD drops and reassess later.

Thoughts on USD anyone? @Caseynotes (you used to major on FX) @elle @PandaFace @TrendFollower, anyone else want to join the party?

[Caseynotes]

Not really looked too deeply at currencies for a while to be honest @Mercury, was watching the volatility charts that were steadily sinking from 2016 on. 2017 was just dire and making things difficult. Looking again now see things have picked up recently with the usd resurgence.

  

[Caseynotes]

Could be strong headwinds for the Euro tomorrow. Macron's popularity has sunk below 30 % was reported last week and now La Pen's party overtakes Macron in EU parliament polls. Reuters report.

https://www.reuters.com/article/us-eu-parliament-france/french-far-right-overtakes-macron-in-eu-parliament-election-poll-idUSKCN1N904J