FX Wars Episode 2 - Attack of the CAD clones!
Updated
Round 2, Fight!
Result Round 1 see here:
After my first EURCAD short hit the target and the EURCAD made a nice retracement to the upper edge of the range, I basically enter the same trade again:
I split the trade into 2 positions:
I short the EURCAD once here directly and at the same time place a limit order at the current range high of 1.51000.
I place the take profit at 1.41000.
A tasty 1000 pips profit awaits me :)
I have already explained the reasons for this in detail in the 1st episode.
A summary:
Once upon a time, a long, long time ago, there was a confused rebellion by the European Central Bank (ECB).
It erred in almost all important matters and plunged the European economy into a severe crisis.
The beneficiaries are the renegade followers of the CAD empire, including myself. They are (once again) profiting from the sheer ignorance and short-sightedness of the ignorant ECB Council by shorting the EURCAD.
- As predicted back in July, inflation in the eurozone fell far faster than the ECB and the market had expected.
- At the same time, eurozone GDP was also far worse than expected (as I had predicted, see commentary of 6 September.
- The ECB is (once again) wrong on all counts and is reluctant to utter the forbidden words "interest rate cuts". The most important ECB members do not see the possibility of considering interest rate cuts until the end of 2024 at the earliest
-> This is a fallacy and the market will already be discussing interest rate cuts with the ECB at length in Q1
-> I see a high probability that we will be very close to the ECB's first rate cut as early as April 2024.
More will of course follow in 2024.
To be continued...
Result Round 1 see here:
After my first EURCAD short hit the target and the EURCAD made a nice retracement to the upper edge of the range, I basically enter the same trade again:
I split the trade into 2 positions:
I short the EURCAD once here directly and at the same time place a limit order at the current range high of 1.51000.
I place the take profit at 1.41000.
A tasty 1000 pips profit awaits me :)
I have already explained the reasons for this in detail in the 1st episode.
A summary:
Once upon a time, a long, long time ago, there was a confused rebellion by the European Central Bank (ECB).
It erred in almost all important matters and plunged the European economy into a severe crisis.
The beneficiaries are the renegade followers of the CAD empire, including myself. They are (once again) profiting from the sheer ignorance and short-sightedness of the ignorant ECB Council by shorting the EURCAD.
- As predicted back in July, inflation in the eurozone fell far faster than the ECB and the market had expected.
- At the same time, eurozone GDP was also far worse than expected (as I had predicted, see commentary of 6 September.
- The ECB is (once again) wrong on all counts and is reluctant to utter the forbidden words "interest rate cuts". The most important ECB members do not see the possibility of considering interest rate cuts until the end of 2024 at the earliest
-> This is a fallacy and the market will already be discussing interest rate cuts with the ECB at length in Q1
-> I see a high probability that we will be very close to the ECB's first rate cut as early as April 2024.
More will of course follow in 2024.
To be continued...
Note
📊🇩🇪The German Inflation data will be weaker today than the consensus expects it.-> wonderful for my EUR Short!:)
Note
📊🇩🇪As forecasted the German Inflation data was much weaker (3.2) yesterday than the consensus (3.5) expected it.Easy game✅️
And my EUR Shorts just keep printing, I love it!😉
Note
📊🇪🇺Of course the EUR CPI will also come in weaker today than the consensus expects it.🔮As I already forecasted in July (!)
("In december we will have a CPI in the eurozone at around 3%")🔮
✅️And here we are, at the start of december, with a sub 3% reading today✅️
Note
📊🇪🇺As forecasted Inflation data from the EU came in lower than consensus expectations✅️🔮We are now as predicted in July
(Quote: "and reach the 2% target in the first half of 2020 at the latest.")
closer to the 2% target than the market and the ECB in particular dared to dream a few months ago 🤫
🏛🇪🇺The ECB meeting in December will be an extremely exciting circus event when all of the ECB's inflation and growth forecasts have to be revised downwards (as predicted🔮)
📉 My 🇪🇺 EURCAD 🇨🇦 trade is developing nicely and is currently in profit with +180 pips ✅️
Note
🟢The Trade is developing nicely🟢Up over 260 Pips so far✅️
More to come!
🏛🇪🇺The ECB decision next week will decide about the nearterm future of the EUR.
One thing is for sure:
They will have to cut their growth & inflation forecasts a lot
-> thats a negative for the EUR longterm📉
Note
The trade is up +400 Pips✅️ and I'm taking a partial profit here✅️
🟢further 400 Pips till the target🟢
🏛🇪🇺This week we have the ECB decision and a lot of other important data points, so
-> better safe than sorry!
Note
🟢The trade is developing nicely: the support at 1,456 seems to be holding (for now).As soon as this breaks, the next target would be the 1.44 mark.
From there it is not far to the take profit.
-> I am very optimistic that the trade will hit the target in H1 24 ✅️
Note
🟢The trade still hangs on the support at 1.456 as if it life depends on it (and it does!) -> Soon it will break and I expect a quick move to the 1.44 mark✅️
📊🔮 The next focus will be on the EUR inflation data this week. It will show a rise in inflation and lift it back towards the 3% mark.
-> This could put the ECB in the wrong boat, as this boost will only be temporary due to base effects and a one-off effect from the German energy price brake.
The February and March inflation data at the latest will clearly show the misconception of the ECB about higher inflation in the long term ✅️
Note
📊🇪🇺PPI Data out of the Eurozone will come weaker today than the consensus expects it.-> Great for my EURCAD Short✅️
Note
📊🇪🇺As forecasted the PPI Data out of the Eurozone was weaker than the consensus expected it.-> easy✅️
📊🇪🇺The February CPI out of the Eurozone will be the most exciting EUR data since a long time, since it will determine when we will get the first ECB rate cut
-> My base case is still April✅️
Note
📊🇨🇦 CPI out of Canada was a tad more on the hotter side and therefore keeps the BOC from cutting rates (for now)🏛🇨🇦The market prices a first cut for the march meeting, which I see as too aggressive.
Every strong data point (Employment data early february for example) could price out more cuts out of the march meeting and so push the EURCAD further down🟢
Note
📊🇨🇦 CPI from Canada came in (slightly) higher than expected: as expected, the market immediately started pricing out the BOC's rate cut in March again📊🇨🇦 With the labour market data from Canada this Friday, we will again get an insight into when the BOC's first rate cut will follow.
Meanwhile, my EURCAD continues to be great fun and is currently over 400 pips in profit✅️
-> I'm loving it!🟢
It is clinging desperately to the edge of support at 1.45 and will very probably break it soon, which will be followed by another fall into the deep abyss (1.42 region)🟢
Note
This week we have the📊🇪🇺PMI (Purchasing Managers' Index) from the eurozone and the
📊🇨🇦 CPI out of Canada -> two extremely important data points for the EURCAD.
Meanwhile, the pair is getting closer and closer to an extremely attractive short zone.
-> I will wait for this week's events to pass before possibly building another short in EURCAD🟢
Note
🔮My crystal ball tells me:📊🇪🇺The EUR Inflation data (CPI) will come weaker today than the consensus expects it.
-> wonderful for my EUR Short!🟢
Note
🔮 As predicted, the 📊🇪🇺EUR inflation data was lower than expected by consensus.-> The EUR subsequently saw weakness
-> EURCAD is (slowly) heading south again🟢
-> All conditions (for the ECB) to cut interest rates are met ✅️
🏛🇪🇺 Nevertheless, I expect the ECB (out of sheer stubbornness) to wait until June for the first rate cut.
-> If Lagarde hints at interest rate cuts for June AND July today, the beatings for the EUR will continue until morale improves💥💥💥
Note
📊🔮My crystal ball tells me:
EUR CPI (inflation data) today will be lower than consensus expected.
-> This is great news for my EURCAD shorts!🟢
🔮 As predicted a year ago, 📊🇪🇺EUR inflation will already hit the ECB's inflation target of 2% today (contrary to the ECB's completely abstruse forecasts)
🔮My forecast:🔮
The ECB will cut interest rates again in September✅️
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