1800 didn’t provide the support needed on EU, as I posted in my last analysis. I didn’t want to make new forecasts, until the chart was more clear to me. Now after FED and strong bottoming around 1700, along with strong bottoming on GU and Gold, I think we have found our spot to finally bounce from. On wednesday, Powell again mentioned tapering and market jumped right on it, with buying the dollar some more…but I knew that the move would be short lived. Too many people jumped on it, even though nothing he said was really hawkish. And you don’t even need to read between the lines to see that. He used phrases as “IF PROGRESS CONTINUES, TAPER MAY SOON BE WARRANTED.” So he couldn’t even confirm tapering was a done deal, if the numbers keep getting better. What do you think will happen if they get worse? FED is just looking for excuses for real tapering to start, not to create a big mess on the markets. I don’t think any tapering will happen this year, next meeting should be about new excuses why it can’t happen yet. But even if they did start…november is still far away and that should help dollar bears to get into better positions until then. On the other hand, BOE meeting was hawkish, with another member voting for tapering, so there we have some real decisions, not just talk. Pound turned bullish and looking at the daily chart, we have a strong tripple bottom in place! Unless the current lows break, GU is on its way back towards 3845-3900. Gold was also strongly bearish the last couple of days, but bulls managed to protect 1750, so I am expecting another run towards 1800 and higher, along with the expected dollar weakness in the coming weeks.
