Everyone is watching the Euro. So am I.
I only track three currencies for trading these days. The Euro (and inversely the USD), and the CDN/USD pair. I don't trade forex, but simply try to manage investment accounts currency-wise.
I have always found the Euro to have relevance with gold. The cycles are very similar, and the best runs for gold shares do not start without a decent rally in the Euro (and inversely a weakening USD).
I don't think I need to discuss the Euro and its travails this year. I am not surprised that it is being pounded as it is. I have been expecting a 4.5 and 9 year low this year. What did surprise me was how long it took the Euro to rollover (ie. till Dec 2009). I had been looking for a top there by Oct. 2009 latest.
I've shown below an expert model and two examples of The Hurst Trader (THT) runs. The first is THT on its own. Note that it places the 4.5 and 9 year lows in October 2000. This timeframe coincides with the bottom in gold shares (which was mid-Nov. 2000).
IMO, the actual 4.5 and 9 year low for the Euro occurred mid-2001, nearer the actual bottom and likely 4.5 and 9 year lows for gold. So I have shown below my expert model and a reasonable Hurst phasing for the 18 month on up to the 9 year cycle.
With this expert model as reference, here is the THT output.
So it appears that either the Euro is approaching a very important low in the coming weeks, or the USD has likely turned extremely bullish for some reason. I am inclined to think that we are fast approaching another USD crisis which could be extremely inflationary. But until the Euro bottoms, it will feel like a deflationary event is upon us.
I'll add a recent monthly gold (cont. futures) chart I ran with my expert model. If I didn't know any better, I'd say the 9 year low is in for gold. It occurred either last year, or in Feb. 2010. There are limitations with using Hurst nominal cycle periods for gold, but just the same, there is a very bullish picture unfolding for gold later this year.
Once the EUR/USD pair reverses, I think it will have a dramatic effect on stock markets, commodities, gold and gold shares etc.
cheers,
john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain
IMO, the actual 4.5 and 9 year low for the Euro occurred mid-2001, nearer the actual bottom and likely 4.5 and 9 year lows for gold. So I have shown below my expert model and a reasonable Hurst phasing for the 18 month on up to the 9 year cycle.
With this expert model as reference, here is the THT output.
So it appears that either the Euro is approaching a very important low in the coming weeks, or the USD has likely turned extremely bullish for some reason. I am inclined to think that we are fast approaching another USD crisis which could be extremely inflationary. But until the Euro bottoms, it will feel like a deflationary event is upon us.
I'll add a recent monthly gold (cont. futures) chart I ran with my expert model. If I didn't know any better, I'd say the 9 year low is in for gold. It occurred either last year, or in Feb. 2010. There are limitations with using Hurst nominal cycle periods for gold, but just the same, there is a very bullish picture unfolding for gold later this year.
Once the EUR/USD pair reverses, I think it will have a dramatic effect on stock markets, commodities, gold and gold shares etc.
cheers,
john
