Is France Party Pooping On The EZ? | $EUR $USD #ECB #EURO #forex
Friends,
Recently, the EZ fundamentals have been weighed down by Europe's second largest economy, when today France posted economic data bringing deflationary pressures to the forefront. What's worth reframing here, is that this week's significant decline in the EURUSD Forex leader occurred in spite of Germany's positive data - First question that comes to mind is whether the peripheral bears could potentially break Germany's bullish back. Furthermore, when compared against economic data signaling a potential recovery - however serious or manipulated they might be - from across the US, a second question is whether this potential bullish USD would be sufficient to ignite a market-wide run out of the EUR currency.
ECB Vice-President Vitor Constancio stated this past Thursday that the Eurozone was sitting in a "creditless recovery" with very low inflation but that moderate growth would likely result from the broader recovery gaining traction in the currency area, adding:
"We have therefore reaffirmed our forward guidance and stressed that we are determined to act swiftly if required and do not rule out further monetary policy easing."
- Could this be any more telegraphic?
How about his following statement, then:
"he again noted that next month's ECB Staff forecasts for medium-term inflation would be the main criteria for any interest rate decision by the Governing Council when it meets in Frankfurt on June 5."
- I'm willing to wait, but for now, let's look quickly at the technicals.
WOLFE WAVES:
The chart highlights a very relevant technical event, which is that of a Wolfe Waves completion in two separate granular scales, with Point-5's lining up precisely at the same time. The particular nature of Wolfe Waves is that it points to a TP zone along its 1-4 Line. I thought it interesting that the respective profit-taking lines crossed on Bastille Day, on July 14th, 2015 - Next year.
PROP PATTERN & PREDICTIVE/FORECASTING MODEL CONVERGENCE:
A prop pattern I own completed right at 1.38319. Here too, I found it interesting that it lined up closely to TG-1 = 1.38690, based on a prop model that I use in my predictive analysis and forecasting. This is the model that I have used to successfully define a reversal top and define targets - See charts under my profile for reference.
OVERALL:
Taken as a whole, the tone of the model is neutral to bearish, whereas the patterns are pointing to a degradation of the pair. But, in closing, here is what ECB Weidmann said this week:
"Moreover, the real effective exchange rate of the euro is approximately where it was also at the start of Monetary Union."
- Does he mean back down to 0.89000?
Cheers,
David Alcindor
Predictive Analysis & Forecasting
Twitter: @4xForecaster
Recently, the EZ fundamentals have been weighed down by Europe's second largest economy, when today France posted economic data bringing deflationary pressures to the forefront. What's worth reframing here, is that this week's significant decline in the EURUSD Forex leader occurred in spite of Germany's positive data - First question that comes to mind is whether the peripheral bears could potentially break Germany's bullish back. Furthermore, when compared against economic data signaling a potential recovery - however serious or manipulated they might be - from across the US, a second question is whether this potential bullish USD would be sufficient to ignite a market-wide run out of the EUR currency.
ECB Vice-President Vitor Constancio stated this past Thursday that the Eurozone was sitting in a "creditless recovery" with very low inflation but that moderate growth would likely result from the broader recovery gaining traction in the currency area, adding:
"We have therefore reaffirmed our forward guidance and stressed that we are determined to act swiftly if required and do not rule out further monetary policy easing."
- Could this be any more telegraphic?
How about his following statement, then:
"he again noted that next month's ECB Staff forecasts for medium-term inflation would be the main criteria for any interest rate decision by the Governing Council when it meets in Frankfurt on June 5."
- I'm willing to wait, but for now, let's look quickly at the technicals.
WOLFE WAVES:
The chart highlights a very relevant technical event, which is that of a Wolfe Waves completion in two separate granular scales, with Point-5's lining up precisely at the same time. The particular nature of Wolfe Waves is that it points to a TP zone along its 1-4 Line. I thought it interesting that the respective profit-taking lines crossed on Bastille Day, on July 14th, 2015 - Next year.
PROP PATTERN & PREDICTIVE/FORECASTING MODEL CONVERGENCE:
A prop pattern I own completed right at 1.38319. Here too, I found it interesting that it lined up closely to TG-1 = 1.38690, based on a prop model that I use in my predictive analysis and forecasting. This is the model that I have used to successfully define a reversal top and define targets - See charts under my profile for reference.
OVERALL:
Taken as a whole, the tone of the model is neutral to bearish, whereas the patterns are pointing to a degradation of the pair. But, in closing, here is what ECB Weidmann said this week:
"Moreover, the real effective exchange rate of the euro is approximately where it was also at the start of Monetary Union."
- Does he mean back down to 0.89000?
Cheers,
David Alcindor
Predictive Analysis & Forecasting
Twitter: @4xForecaster
