EURUSD Bigger picture Since the downtrend started in Mar 2008

Here is a bigger picture :

The Major EURUSD Downtrend started in March 2008 until now. we hit a Double bottom at around 1.0450 Area and bounced a bit but the major upper line of the major downtrend is being tested again.

NOTE:

EURO Zone is an Export oriented zone. They need a lower EURO for them to be able to sell their products outside EU. Chinese companies have been eating EU companies lunch everyday. The Lower the EURO the more they sell to world at affordable prices.

The Current situation:

EURUSD has spiked 1.1810 area due to major weakness in USD across the board.

Major Resistance at the top are at :
- 1.2530
- 1.1910

Major Support at the bottom are at:
-1.1400
-1.1182
-1.0879
-1.0450 ( Current Double bottom area of the Major Downtrend)

At this point. EU passed the Covid-19 stimulus of about 2 Trillion Euros for the first time. That will create a lot of EURO liquidity in the market when it starts to flow.

If EU maintains that it wants EURO(EURUSD) around 1.0800 Area then we can expect the market to push the EURUSD back to the 1.0450 Double bottom area otherwise we will begin the uptrend if it breaks the major upper trend line.

Comment:

Note: The Major EURUSD Range for the last 5 years has been (since Jan 2015 until now Jul 2020)

1.1600 (Top) to 1.0430(Bottom)

It broke out of this range in July 2017 and swiftly collapsed back into that range in August 2018 after 1 year slightly above the range ( 1.2500)

This "Golden Range" is where the EU ECB wants the EURO because its great for EU businesses , anything above the top is hurting the EU business competition

Comment:

Expect a pullback back to 1.500 to 1.4000 area before we see any meaningful uptrend , All this depends on USD flows and strength

if Central Banks start buying then expect USD to strengthen a bit.

Comment:

We have broken or spiked above 1.1910 on EURUSD in the last 5 weeks . Chance are that the rally might extend to 1.2530 before any any pullback . Note: The rally is fuelled by USD weakness not EURO strength

Comment:

This is just a temporary dead-cat bounce off a main trend line . EURUSD is below its 200-day MA .

www.bloomberg.com/ne...-s-yields-spoils-bet

The largest investment and trading bank in the world and US , Goldman Sachs, Axes Short Dollar Call as U.S. Yields Spoil Bet. Remember 10 largest top Major banks in the world BANKS control the FX and CFD liquidity and liquidity is king. They have enough war chest to obliterate any major order against them in order to protect their positions and if they can't they get out of the speeding train.

Now ask yourself one question: about RISK???? . Why on earth would Goldman Sachs close a very profitable position(call) they made open in May/jun 2020 to short the USD if they believe that the EURUSD will be at $ 1.2100 in 3-months and $1.2800 in 1-year ? Why not lower the StopLoss to cover your profits since they are Long-Term investors. The US treasury yields are starting to rise and US Govt Spending is also creating fears of high inflation. housing markets are heating up . Does that sound like Safe Heaven play on the USD ?

" Opportunities to short the dollar may re-emerge as Europe’s pandemic situation improves, the Goldman team wrote. It sees the euro gaining in the next three months to the $1.21 level before testing $1.28 in a year. The common currency rose 0.5% to trade around $1.1814 at 12:37pm Monday in New York. "

This looks to me like " a dumb/newbies" slaughter house setup. it goes like this . Before a major dead cat bounce from a major support / resistance , the Banks get out of major positions with a fat profit. Then speculators jump in to drive the rally up/down until it fizzles and while speculators/newbies are still holding onto positions hoping that EURUSD will move as per Goldman Sachs analysis or any major players for that matter. Then the Big Boys lower the Sledge Hummer and they will keep hummering until speculators get out of the way . That's the game.