Just before Christmas, I said that 2016 there would be a great trade in gold and that certainly is the case so far. So I hope some of you loaded up on the one stock that I really like – Newmont mining, NEM.
Now it’s the turn of the Euro.
Europe is in a mess, with a huge migration problem and steady discourse between member states on how to react to this problem. This ultimately, I believe, will be the catalyst that drives the Euro path as each country looks after its own interests and citizens. Unlike America, that just has one central bank, each country in Europe still has its own central bank which can make its own decisions, which ultimately each will do.
The Euro since 2008 has had a 32% decline and this is supposed to be a major currency. So let’s look at the charts as I believe we will have a great opportunity to trade on the short side.
Euro Monthly Chart
Since the beginning of 2009, the Euro has been in decline and right now is entering congestion on the monthly with overhead resistance (where I have placed the blue line). However, if the low of 2015 is taken out, brace yourself!
Euro Weekly Chart
This market timeframe is displaying classic congestion with choppy volume between selling, no demand, and short-lived rallies on buying volume.
Notice where the price went right up to (where I have placed the magenta arrow) which coincides with the Hawkeye barrier which generated a yellow Pivot.
We now need to see this market come back and take out those April lows
Euro Daily Chart
As you can see from where I have placed the cyan arrow, the price is choppy and the Hawkeye Trend dots have gone flat, signaling more congestion.
We now have to wait for a Hawkeye Pivot high to come in which will push the market back down. And, subject to a close under the low Pivot 1.0825, we will have have the end of congestion with an exit to the downside and can get into this trade, bearing in mind the other timeframes resistance and support areas.
As I have with gold, I’m highlighting a position trade here which could last for several months.
Eventually, I do believe a great opportunity will come our way this year.
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[The magenta and cyan arrows are for illustration only and do not form part of the software]