I might be cynical, but there simply is nothing new fundamentally in the last 3 weeks. The markets know that unlimited liquidity is not the answer. At the same time where to go? Large Cap multinationals are growing, somewhat slower, but the world has not stopped.
A anecdotal example: German car sales in China were up by 40% y/y while Japanese brands were down sharply. Is this because of the overvalued Yen? It does not help, but my guess is that for those who can afford a foreign car, the German status symbol is simply greater.
Among the potential black swans: Operation Murky Water, a potential plan by the Iranians to create a major ecological disaster in the Strait of Hormuz (see the Spiegel online). The consequences are vicious.
The EURUSD has been trading inside of the range of 1.2890-1.2990. The 50 % fib retracement is at 1.2948, the 45 day pivot is at 1.2948, the weekly (based on last week) at 1.2940, the daily pivot is at 1.2940. This morning, in Europe, we opened at 1.2910, close to the S2. The pivot was at 1.2955. Such divergence creates an attraction towards the pivot and a long position was taken. 1/3 was sold on the pivot, the rest when R2 could not be reached.
I continue to be leaning on the long side and will start a long position at 1.2950, if possible.
PP 1.2940 R1 1.2983, R2 1.3017, R3 1.3093
S1 1.29065, S2 1.2865, S3 1.2785
