12.31.2021

We are sitting at a very pivotal level in EURUSD. One that goes back on a long term chart as strong support.

What does that mean ?

These levels on charts are pivotal and sometimes they lead to regime changes. I notice on the weekly chart as set of higher lows being made, something that has caught our attention.

The pair is sitting on a long-term FIBO line that is acting as support.

What would a REGIME CHANGE look like ?

Let’s expand the view to a MONTHLY CHART:

The last major REGIME CHANGE happened after the GFC in 2008. That marked the low for the USD as the world realized that no matter what, when a global credit crisis occurs, the safest asset is the DOLLAR. We are going into the 15th year of that trend, and the pair is now showing signs that it may put that trend to the test.

We do not want to get ahead of ourselves, but we are comfortable with our LONG EURUSD call, knowing we have convexity as we are very close to the support level and keeping the option that we may be entering a pivotal regime change in the USD.

As we can see from the MONTHLY CHART that illustrates the correlation between the US CURRENT ACCOUNT and the behavior of the USD (DXY):

As per our analysis, the convexity at this point in time favors being SHORT US DOLLARS in favor of a basket of currencies, and we have built and are building those positions.

If you have any questions, please do not and email us: info@bcmptr.com