EU broke all resistance levels this week, first 1.20, then 1.21 and finally bulls got weak below 2180. People seem to be panicking, closing their shorts and going long, which I don’t think is a good idea. Not at these levels, that is. Since the move happened early in the month, it can easily be a trap…the monthly candle only started and has most of the month left to close. In my experience, end of month and start of month are used to build big positions by big players. So its too early to tell, if this move is a definite breakout north or just a trap, with a possible monthly close below 1800 or lower. If it turns out to be a confirmed break out north, this would be the worst place to buy, anyway. I am seing 1880-1920 as the first area, which has a bullish potential again…and the second area would be 1750-1825. So bears might have better opportunities to close their shorts at those levels. This month’s close will give us a clue, if it will be time to start looking for longs next month or if bears take over. This month, there is nothing positive for bulls anymore, fundamentally. It looks like there won’t be a brexit deal after all, not this month that is. Following the negotiations this week, no side wants to make any concessions. And in my personal opinion, EU wants to “punish” UK for leaving, so they might let UK leave without a deal…let them suffer a little early next year, only to “force” them into a deal more suitable for the EU. Either way, this month, both EU and GU should depreciate, as the uncertainty grows. And lets not forget problems with the EU budget, which Poland and Hungary want to veto. So there is no time to panic for EU/GU bears, especially when dollar found some support at 90.50 today. AUD and NZD are topping with the USD also. UJ and UCHF bottoming…so I don’t see anymore dollar weakness this month. Profit taking might start as early as next week, taking USD back towards 92.50-93.00.
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