Forex Investment and Currency Trading

Flip from short to long at 1.5555 with a stop loss at 1.5350 and a target of 1.6300. Why?

• The failure once more at the base of this pattern in place since March is now making this picture look extremely similar to that seen in the November-January period before EURUSD broke higher again.
• A close today above 1.5485 will create a bullish key day reversal off the low end of this trend.
• In addition the look of the pattern is now of a triangle with an embedded double bottom. This has become one of the favourite patterns
• This pattern suggests a move back to and through the 1.5819 resistance level and set up the way for a new high close to Long Term target of 1.6300
• Combine with this the fact that the yield differential is now going strongly against the USD again. Combine this with the fact that the ECB undoubtedly now INTENDS to hike (a mistake perhaps but that is for another day. The mistaken hikes by the RBNZ still buoyed the currency) and market believes it is more likely that hell will freeze over than that the Fed will hike anytime soon and the stage is set
• On the one side you have the FED and treasury in the business of platitudes regarding rates and currency but doing nothing. On the other side you have the ECB who like it or not has been consistent and true to its word (no flip flops). This suggests that the comments of today high a high possibility of being met with action

This is simply not a recipe for the recent correction lower in EURUSD to continue. So market thinks this move lower in EURUSD is over and that this will be the platform for a move towards 1.63 (Possibly a lot quicker than anybody thinks-maybe as little as 8 to 10 weeks from now)