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EUM2

Money Supply Bull Flag ???Maybe this is a massive money supply flag. We have support on the ribbon. Stochastic RSI confirms it. I don't know if this even makes sense, since CURRCIR is a subset of M2SL. On the other hand, who would have thought that in 1990s currency in circulation would increase by 50% in less than a decade. Or is there a ceiling prohibiting more increase? Also look at the ratio between Europe's money supply and US. And my favorite, the most accurate retracement ever. Total "purchasing power" of Europe vs US. Just recently we have reached a perfect golden ratio. 1 in 10.000 accuracy. Maybe this is a harmonic pattern. Feel free to guide me as to what this might be. And how price might continue in the following months/years. A closeup view. Maybe Europe will print so much money that it diminishes its currency. This chart suggests that EURUSD is in reality much weaker than it seems. A lot of Euro is printed compared to Dollars. Maybe they get more hawkish than the US and increase rates to >5%. I am not sure... Prepare for unforeseen consequences I guess? - G-Man, Half-Life 2
FRED:CURRCIR
by akikostas
EU vs USDon't you have the question on why did Euro bounce off $0.95358, and not in some other weird ratio??? This chart explains it. A larger look on the chart. One could compare the ratio between EUM2 and M2SL to get an idea of the money supply ratio between the two "unions". Since I THINK that EUM2 is measured in supply of Euros, we should normalize the data. Therefore we multiply by EURUSD. So we get an accurate comparison of the money supply between them. With this transformation, certain trends are much clearer and VERY accurate. EURUSD by itself doesn't show a clear explanation on why the sudden drop of Euro occured back in 2014. Whereas this chart shows it clear as day. Price was dead for several months before violating the trendline. As for the brief loss of the 1:1 ratio that occured several weeks ago... One could draw convincing retracements from the standard EURUSD chart that pinpoint the local bottom. This chart though pinpoints it to an EXTREME level. From the 1985 bottom to the 2008 top, the .618 retracement (in log scale) was respected with an incredible accuracy. Accuracy that high that is virtually immeasurable. This was drawn with magnet tool of course. This is the candle of Sep. 18 2022 Price stood a hair above the retracement. It as good as you are going to get in such long timeframes. This is not surprising. The fundamentals of the pair depend on the supply of money between the two "unions". So where does this leave us? Right here... With the incredible amount of money printed by the US, the price of Euro simply hasn't caught up. One could state that since the US has printed all that money, that eventually the price of USD will go down, therefore the real drop is 24% and not 33% that this chart describes. Considering though the pressures of the money flow worldwide, and with the Dollar Milkshake as a guide, the effect will be the opposite. Europe needs Dollars more than US needs Euro, the pressure is towards USD. So I would guess that there will be at least a 10% drop for the Euro. The next station will be around $0.85. And this ratio is not good for Europe. In mere months Europe lost more than 20% of it's purchasing power, and being a continent that relies on imports (we don't have substantial oil production), the situation looks grave indeed... This chart shows the "purchasing strength" or "purchasing ammo" between EU and US. And the speed the chart moves downwards is very alarming. While the standard ratio of EURUSD looks hopeful, this does not. We have A LOT of road to cover for the pair to turn bullish. The ribbon is inverted and very wide, this is an incredible challenge for Euro considering the world pressures. Tread lightly for this is hallowed ground. -Father Grigori
by akikostas