EUR Complex - How to hedge EUR , what is its relative power?
When people say the EUR is weaker, most of the times they mean against the USD, as EURUSD is the most liquid and most traded FX cross in the global ccy market. But from time to time I like to check the weekly technicals against other major ccys too. It is new year, and either due to Greek early elections and political changes, or to ECB policy extension, the EUR may become under bigger pressure soon. Let's check the EUR relative power.
EURUSD: No question, it has totally collapsed and in terms of Ichimoku we can not see any sign of a reversal on the weekly chart. If we quickly look at the other crosses, we can see that EURhas been the weakest against USD, which is not a surprise regarding the increasing expectations for FED rate hikes and ECB QE. The Price got very far away from Kijun Sen, so some kind of correction would be healthy, but that won't change the major trend, so we have to assume 1,24-1,26 range is a strategic sell area in case.
EURNOK: Basically NOK has been hurt a lot by collapsing oil prices, and the pair blow up. NOK was the worst performing G10 ccy last year. Still at some point if EUR weakens further, EURNOK should come lower too. If it breaks below 9,00 first support (Kijun Sen and Senkou B) then a deeper correction could send it down to 8,55-8,60, but still there is the major bullish support at 8,52. This pair will stay volatile and it will depend on oil price fluctuation. However we have to keep in mind, that Norway has virtually no debt at all, it is really a AAA rated country and has huge cash reserves. So keep an eye on it.
EURSEK: Following its brother, this Scandinavian pair is also bullish trending. Major support is 9,26. We have to watch the macro numbers coming out from Sweden, astheir recent figures have beaten expectations, so in fact it looks like Swedish economy is not doing that bad. If the macro difference stays positive compared to Eurozone countries, and the pressure increases on EUR, then SEK can be a good alternative later.
EURGBP: Bearish, but the Price action has been loosing some momentum, likely due to weaker numbers coming out from Britain. Tenkan and Kijun lines are getting flattish, Chikou Span is getting close to Price candles, and Price seems refusing the multi year low for the third time since Sept/2015. Will the fourth time attack bring a break? If so, then the bearish trend will resume, otherwise it will range between 0,7800 - 0,8000
EURAUD: This is very hard to read. Actually it looks like trading rather neutral. Price even tried a bullish Kumo breakout a few weeks ago, then dipped back into the Cloud. Tenkan/Kijun stays weak/neutral bullish, Chikou Span is above Price, but enterring a thick past Kumo. Senkou A and B lines point sideaway and composing a thin future Kumo Cloud, which means the volatility has decreased and obviously Price is ard the long term equilibrium level of 1,4800 now. AUD is a commodity ccy too, and its path fundamentally depends a lot on developments in China.
Technically the important levels are: upper - 1,5300, lower- 1,4600 and 1,4200.
If I had to chose, I'd be a seller on spikes as the EUR itself can get really nasty, and also some kind of general correcion in USD could lift up AUDUSD too, but until it's above 1,4600 I'd not open a big leverage short.
EURCAD: Retested the Kumo, then turned down again, crossed back below Kijun Sen, and now testing previous horizontal key resistance. Chikou Span is close to brreak below the Kumo and give a weekly sell signal.
Sell this pair if breaks below the resistance line or accumulate some shorts on spikes, it really looks like a good bearish position with a lot of open space below 1,40.
EURUSD: No question, it has totally collapsed and in terms of Ichimoku we can not see any sign of a reversal on the weekly chart. If we quickly look at the other crosses, we can see that EURhas been the weakest against USD, which is not a surprise regarding the increasing expectations for FED rate hikes and ECB QE. The Price got very far away from Kijun Sen, so some kind of correction would be healthy, but that won't change the major trend, so we have to assume 1,24-1,26 range is a strategic sell area in case.
EURNOK: Basically NOK has been hurt a lot by collapsing oil prices, and the pair blow up. NOK was the worst performing G10 ccy last year. Still at some point if EUR weakens further, EURNOK should come lower too. If it breaks below 9,00 first support (Kijun Sen and Senkou B) then a deeper correction could send it down to 8,55-8,60, but still there is the major bullish support at 8,52. This pair will stay volatile and it will depend on oil price fluctuation. However we have to keep in mind, that Norway has virtually no debt at all, it is really a AAA rated country and has huge cash reserves. So keep an eye on it.
EURSEK: Following its brother, this Scandinavian pair is also bullish trending. Major support is 9,26. We have to watch the macro numbers coming out from Sweden, astheir recent figures have beaten expectations, so in fact it looks like Swedish economy is not doing that bad. If the macro difference stays positive compared to Eurozone countries, and the pressure increases on EUR, then SEK can be a good alternative later.
EURGBP: Bearish, but the Price action has been loosing some momentum, likely due to weaker numbers coming out from Britain. Tenkan and Kijun lines are getting flattish, Chikou Span is getting close to Price candles, and Price seems refusing the multi year low for the third time since Sept/2015. Will the fourth time attack bring a break? If so, then the bearish trend will resume, otherwise it will range between 0,7800 - 0,8000
EURAUD: This is very hard to read. Actually it looks like trading rather neutral. Price even tried a bullish Kumo breakout a few weeks ago, then dipped back into the Cloud. Tenkan/Kijun stays weak/neutral bullish, Chikou Span is above Price, but enterring a thick past Kumo. Senkou A and B lines point sideaway and composing a thin future Kumo Cloud, which means the volatility has decreased and obviously Price is ard the long term equilibrium level of 1,4800 now. AUD is a commodity ccy too, and its path fundamentally depends a lot on developments in China.
Technically the important levels are: upper - 1,5300, lower- 1,4600 and 1,4200.
If I had to chose, I'd be a seller on spikes as the EUR itself can get really nasty, and also some kind of general correcion in USD could lift up AUDUSD too, but until it's above 1,4600 I'd not open a big leverage short.
EURCAD: Retested the Kumo, then turned down again, crossed back below Kijun Sen, and now testing previous horizontal key resistance. Chikou Span is close to brreak below the Kumo and give a weekly sell signal.
Sell this pair if breaks below the resistance line or accumulate some shorts on spikes, it really looks like a good bearish position with a lot of open space below 1,40.
