Euro-dollar selling strategy, strategy meeting after the U.S. midterm elections! ~ Euro-dollar selling strategy on November 7 ~
◎ Strategy and Holdings
Euro sell / Dollar buy strategy
Dollar-buying factors
・Since it aligns with consensus, it is not a major dollar sell-off
・To prepare for the 2020 presidential election, implement approval ratings measures
・Strong economic growth
Euro selling factors
・Italy budget issue
・Brexit negotiation issues
・Recent information on “TLTRO”
Note: FOMC meeting scheduled
◎ Outlook
The U.S. midterms have ended. The result aligns with expectations: the Senate Republican, the House Democrat.
Because of this, I think position-decluttering dollar selling will occur, but once the adjustment finishes, the dollar will turn higher. The economy is solid, rates are rising, stock prices are rising, creating a dollar-buying environment. Also, looking around, there is no currency that can be definitively bought, which supports this view. Regarding next year’s number of rate hikes, which is the neck, I expect the dollar to remain strong from now through the first quarter of next year.
Following the United States, it is said that the normalization of monetary policy will move toward the EU (Euro). Last year the euro was bought, but due to Italy issues it is currently losing pace. Therefore, I expect the euro/dollar to be in a range or downtrend.
The euro shows no sign of solving the Italy issue.
Next notable day: the 13th!
Deadline for Italy budget revisions. In the EU, fines are starting to be talked about. With S&P also viewing the outlook as “negative,” a downgrade is likely if this continues.
If this continues, Italy’s fiscal deficit will widen and could trigger a European crisis. Also last week there was news about “TLTRO.” Many surmise it is a response to Italy, but since TLTRO itself is a easing policy, if it is implemented it could lead to euro selling.
Considering everything,Euro selling / Dollar buying seems likely to stabilizefor now.
Please refer to the following for information on “TLTRO”
“LTRO” and “TLTRO” ECB relaxations now! — FX glossary —
Looking at the daily chart below, will it reverse at1.1500?
Or will it rise to “1.1750” and then fall again?
I am watching closely.
Since I expect a pullback near “1.1500,” I will enter a short position, but I want to place a relatively shallow stop.
If it breaks higher, I would like to re-enter short at “1.1750.”
My target is to break below “1.1300”; if it returns, I will take profits.
For now, I will time entries while watching today's situation.
Also paying attention to the FOMC statement.
EUR/USD Daily Chart
EUR/USD 4-hour Chart
EUR/USD 1-hour Chart
