Another powerful year for the markets, 2021 saw a great monetary policy shift back towards “neutral” from the FED and most G10 central banks, that shift is going to continue and all clues we need for Q1 2022 are there in plain sight, strong hawkish monetary policies and rate hikes will dominate the news flow, we are tracking a lot of opportunities for January and monetary policies divergences will be back in fashion, with obviously the FED (as always) dictating sentiment, we expect a rate hike in March and the market should catch up with that sentiment in early January.

A warm thank you and a Happy new year from the BeSomebodyFX Team

EURUSD continues to accumulate but the macro bias is clear…

We continue to expect 1.10000 to be reached in January tho obviously not in a straight line, keep it smart

Yesterday’s FOMC (minutes) hits the sweet spot for the FED’s hawkish narrative, on top of a rate hike in March the FED will also embark in QT (Quantitative Tightening) at any time after the first rate hike, that’s all we need to know

As of now EURUSD continues to chop into a large sideways range but we expect it to resolve to the downside sooner than later and move towards the 1.10000 targeted level, keep it smart

Wrong on EURUSD for the time being, even tho the macro picture hasn't changed, the current structure shows a large corrective pattern that may take a while to unfold lower, it’s clear that the USD bullish thesis is too crowded and is being squeezed

We will reengage with EURUSD shorts later on once price shows us more intention to push lower with, for instance, a break below the corrective flag structure

We will start to engage with EURUSD shorts above 1.15000 (see technical zone in the chart above) this recent squeeze higher is more position driven (USD long side too crowded) than macro driven and we would expect a resumption lower once sentiment rebalances

The FED is about to conclude the largest QE program ever created, on top of that, unlike any other time, it’s going to embark in QT (the opposite of QE) just a few months after, and all while also hiking rates, we can’t but be EURUSD bears

Watch the situation in Ukraine carefully, it’s most likely going to be the next big catalyst for some volatility

In other words, this is an environment to gradually lean into safe havens, geopolitical tensions heating up in Ukraine, FED about to finish QE and start hiking right away, all while global growth is slowing down, just be mindful of what the macro environment is signaling

We rarely post anything bearish, that was one of those, now that most of your favorite trading gurus out there are bearish we gradually begin to expect this correction on the S&P500 to bottom around 4300, catalyst to ignite a squeeze higher may be Wednesday’s FOMC

EURUSD target reached but never managed to get into the shorting zone, from here the original target at 1.10000 is achievable but obviously risk reward does not favor shorts from these levels

S&P500 starting to squeeze higher as anticipated from 4300, we expect it to tap 4700 before the end of the month

When traders hedge against a potential market crash that doesn’t materialize quick enough, their hedges decay fast, and they are forced to buy back at market in mass, resulting in a squeeze higher on the S&P500

We alerted about the bottom on the S&P500 at 4300 and we continue to expect further upside into 4700

S&P500 update, after a brief squeeze higher earlier in the week it’s back to a zone of interest, choppy but ongoing, nimbleness and flexibility required in a market without FED’s support, expecting further volatility but also expecting 4700 to trade before month end, have a great weekend everybody

Since Ukraine is once again the “hot topic” after the recent US comments about a possible full blown invasion from Russia here’s what we are seeing…

We lean on the optimistic scenario and we do NOT expect a meaningful escalation anytime soon, currently we are S&P500 dip buyers as we expect an easing of tensions (or simply no further escalation, which is enough to turn risk sentiment around) going forward

Obviously that can change, but right now it’s our base case, no invasion, no full conflict anytime soon, yet don’t expect it to be too straightforward, there will be plenty of volatility

S&P500 chopping on the geopolitical headlines, staying (cautiously) bullish here as we don’t expect the Ukraine situation to escalate into a conflict anytime soon, still targeting 4700 but we would be wrong on a clean break below 4300, have a great weekend everybody

4300 on the S&P500 is doing the same exact job it did earlier in February, we stopped on our initial longs with yesterday’s volatility but we will look to re entry on it again in the upcoming weeks with 4700 still in mind, path of de escalation (see chart from the post above this) is still our base case scenario, but geopolitical uncertainty for the time being dominates

Clearly disappointing developments in Ukraine as Russia is officially embarking on a full scale invasion which is taking place in these moments, we have been wrong on Russia’s (Putin) intentions, plain wrong…

There will be a time for de escalation, but that doesn’t appear near YET, now the markets depend on the FED (and other major CBs) reaction to the recent events, sit tight and be flexible, volatility will continue

Not an environment to have any high conviction trades, but the heavy sanctions on Russia, the geopolitical uncertainty in Europe, and a FED that is going to tighten regardless (inflation is all the FED cares about right now) point to inflows into a classic safe haven such as the Dollar

We hold a mild EURUSD bearish bias down to 1.10000 and will be looking to position accordingly upon (multiple) technical confirmations, remember this is a volatile market, conditions can change quickly, stay flexible, don’t FOMO into early entries, don’t FOMO into nonsense trades, keep it smart

EURUSD update, watch for Powell’s testimony coming up, the key focus is on how aggressive the FED wants to be against inflation (in March) after the recent geopolitical developments

EURUSD target achieved, it’s some USD strength yes, but it’s mostly EUR weakness amplifying the move, have a great weekend everybody

Will be sharing our consensus and our trade plan for the event early next week, keep it smart and have a great weekend everybody