Beware of the EURUSD liquidity hunt!!! Don't Get Trapped!

24 sept 2019

There are a lot of people calling for more downside from here on the EURUSD pair. I think they are greatly mistaken and are victims of hysteria and hype. Unless we are invalidating a multi decade EURUSD uptrend, we are currently still within a relatively close proximity to the absolute FLOOR as depicted in this chart. You have to remember that institutions and countries at large look for liquidity slightly above a ceiling, and slightly below the floor in order to fill their bags with units at FLOOR or CEILING prices and to prevent slippage while exchanging significant volume. Creating an image of a "very" bearish trend would enable "smart money" to take the opposite trade, in the end creating a whipsaw movement to the opposite direction once they soak up retail liquidity.

This is what I think is happening. I think that we will see a rapid reversal of EURUSD to the upside - clear toward 1.3 and beyond. Unless globalization has just suddenly stopped, the dollar is still weakening against all other major currencies for the last 50 years, where other currencies continue to take a significant chunk of market share. And although the greenback is still a significant player, value continues to be distributed to other players.

I just think a drop significantly below the floor depicted in this chart is unreasonable - even with Brexit, Trump's America, etc. I could be wrong, but a very long term chart analysis, and fundamental analysis lead me to draw the same conclusion time and time again: the greenback will fall dramatically against the EURO.

This is not financial advice. Everything in this post is simply opinion and for entertainment purposes only. Consult a financial professional before making investment decisions.