LONG EURUSD - MONPOL/ MACRO CONVERGENCE & TECHNICAL BREAKOUT
EUR$ LONG:
1. Daily support base formed ABOVE previous channel highs at 1.17
2. Fundamentally driven breakout on Friday (draghi vs yellen sentiment) should provide continued bullish EUR within the supply/demand complex.
3. Broadly eurozone crisis discounting contoinues to be faded out of the market. I expect RM names to begin pricing the ECB/FED convergence NOW given its around 12-18m away from ECB official monpol tightening (this is the same time the market priced FED hiking back in 2014).
RISKS:
1. DXY support - WATCH 92 handle closely. ADD EURUSD LONGS IF we get a good breakout below 91.7
1. Daily support base formed ABOVE previous channel highs at 1.17
2. Fundamentally driven breakout on Friday (draghi vs yellen sentiment) should provide continued bullish EUR within the supply/demand complex.
3. Broadly eurozone crisis discounting contoinues to be faded out of the market. I expect RM names to begin pricing the ECB/FED convergence NOW given its around 12-18m away from ECB official monpol tightening (this is the same time the market priced FED hiking back in 2014).
RISKS:
1. DXY support - WATCH 92 handle closely. ADD EURUSD LONGS IF we get a good breakout below 91.7
Id like to see a daily O-C bar formed below 91.5 and ideally a good bear breakout (so relatively large selling bar).
USD fundamentals from Sept could cause this with Debt Ceiling, budget, tax reform and possibly NFP (even though it is unlikely to be poor)/