This post was started yesterday but I didn’t get a chance to finish it, so sorry if the charts took place before todays drop in gold.
We have ourselves a golden cross on the dollar after a triangle breakout. A handle or bull flag may be forming. Grab some on weakness over the next few weeks.
The Gold Markets are on the verge of a serious long term breakdown. Currently, gold is hanging on for it’s life.
Huge volume pocket below.
The thing about Cyprus is that banking and tourism are huge drivers of growth in any country. When governments start resorting to draconian measures such as confiscation of wealth do not be surprised to see civil unrest, and when that happens no more tourism. Then they come out saying “it(Cyprus) is an isolated event” as if they are concerned about confidence and believe it may not be an isolated event.
Nevertheless for the time being the Euro looks to be oversold. We could bounce at or near support, form a head and shoulders and then breakdown.
The Euro is not exactly looking terrible, but it’s not looking great either. Wait awhile for a bounce then maybe consider a short.
Ultimately with the $GOLD markets on edge of a breakdown and with Euro not looking great and Dollar looking bullish, I want to be long the dollar. If we get a relief from oversold conditions in the euro I may even want to be long the dollar against the euro. If we peak above the recent trendline in the euro I will not get bullish, but
But if you had lots of cash and it took a long time to accumulate a position, would you store it in a place where it has recently taken deposits from the people, where tourism and banking savings are likely to decline and when there’s a perfectly acceptable alternative in the US dollar? I believe the euro is fundamentally flawed as a currency.
1)No central euro bond, individual country bonds.
2)civil disorder likely on the horizon
3)Tourism in Europe likely dropping
4)Crime to result also dropping tourism more)
5)Gold as an alternative to holding your money in Euros isn’t working either.
I am not going to short the euro based upon an idea when it is oversold, but long live the dollar.
1)Long the dollar
2)Short the Euro
3)Short Gold
Eventually long the YEN may make sense, but not there yet either.
The gold markets simply are too small to support the kind of money in the dollar. tens of billions of dollars in the gold markets is nothing compared to tens of trillions in the dollar.
Long live the dollar!
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