Is EURUSD still a good short?

EURUSD has extended slightly above our main sell zone and the recent impulsive move is questioning our thesis, but nothing has changed to make us reconsider our view:

No US stimulus coming before the elections, new restrictions and partial lockdowns across Europe going to weigh on inflation, an ECB ready to intervene verbally to weigh on the EUR, and stretched Dollar shorts in need to take profit to de risk ahead of the elections.

All of this is in favor of shorts we still like EURUSD downside ahead of the elections, but it's important to never get married to a trade hence we are going to be wrong on a clean break above 1.19

EURUSD diverging from 2W Risk Reversal…

EURUSD recent pop higher isn’t reflected in the 2W risk reversal which means dealers are protecting themselves against a rising chance of a short term selloff in EURUSD.

Expecting a bearish week for EURUSD, likely going to get below 1.18 and possibly touch 1.17, as previously noted, we will be proven wrong on a clean break above 1.19

EURUSD below 1.18 as expected, we continue running shorts as we see 1.17 in reach this week with France and Germany expected to announce further restrictive measures in the next 48h and the ECB meeting tomorrow.

Large speculators are still heavy loaded with EURUSD longs and the big question is, will they wake up and begin to unwind given the election and the lockdown risks?

We think so

EURUSD 1.17 short term target hit…

Lagarde speaks in 10 minutes and we will be all ears for dovish comments, we still run shorts in EURUSD from above 1.18 but aware that we could see a short term bounce from current levels.

Final target is 1.16 but we will be clear ahead of the Election Day regardless if target gets hit or not

We are almost done for the week, Lagarde was dovish enough for us to keep the shorts running, will keep them going until the end of the week, no intention of running this into the election keep that in mind.

We are going to open a few seats for the Private Network tomorrow

Thank everyone for all the interest in the Private Network, all seats have been filled, we are going to open a few more in December.

Have a great weekend and see you next week for some analysis, RBA rate decision, FED rate decision, BoE rate decision, NFP and the last but not least the US election that will decide the trades for the next few months, a busy macro week so keep an eye for any tip we may send here

Since 52% voted Trump here is your Trump win plan

On a Trump win we likely see a short term selloff in the S&P500 on the realization that polls were wrong AGAIN and everybody positioned for a Biden win gets caught off guard.

Then once all the weak longs have been liquidated the run to 3600 begins as the market realizes, 2016 style, that Trump is not that bad for stocks and that the next stimulus check is behind the corner

Votes still being counted, Trump was the favorite during the night but Biden is now slowly gaining ground with the late mail in ballots, Democrats have mainly voted by mail hence why Biden is regaining ground now that those ballots are being counted.

What's the trade if Biden wins?
S&P500 to 3700
DXY sub 90

Both targets before year end

If by any chance you haven’t realized it yet…

Biden has it, the win will be official by the end of the day or early tomorrow

Expecting some short term Dollar strength this week, EURUSD likely to hit 1.17 again

EURUSD squeezed yes, but less than expected, we took some partials along the way and the rest at breakeven, for us to get interested in shorts again it needs to close a daily candle below 1.17800

AUDUSD looks good to take out the double top liquidity, buy low and target 0.73400

After most retail stops are dried up and the weak hands liquidated, that’s when we enter, AUDUSD on its way to hit the double top liquidity at 0.73400