I am a Bull on the Euro because the ECB are slowly tapering their APP. In Jan APP will be cut in half until September ’18. September ’18 doesn’t mark the end of QE right now though that’s a year away and a lot could happen between now and then. I am also looking at COT data from last week and noting that Euro longs are the highest since May 2007. After doing my analysis on Dxy and Gold I also see that we could definitely have Dollar weakness next week though after doing my analysis on the Euro pairs I don’t see price action signaling Euro strength in the coming week.
EURUSD could still turn in the favor of EURUSD Bulls though the other pairs are clearly setup for further Euro weakness so that means EURUSD could head down to the MM1/ MS2 target and then Bulls get in down there as we head into the new year. This tells me I might be wrong about my analysis on the Dollar and Gold where I indicated weak Dollar in the coming week. I am not going to change that trade plan – I’ll just be aware of this and pay careful attention to price action at key levels of support and resistance so that I have confirmation of Dollar strength or weakness.
Even though I am a Bull on the Euro I am aware that I might be early and so I am more than happy to be short-term Euro short and trade the trends on EURAUD and EURNZD. At least the trends are clear and until they a reversal they will continue.