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Sunday, July 11, 2021

EURUSD monthly trendlines.

EURUSD monthly trendlines.

EURO / U.S. DOLLAR FX_IDC:EURUSD

Elilot wave analysis to predict monthly trendlines . Expected to be bearish untill october. May have a monthly trendline reversal soon. Upcoming weeks, neutral to bearish .

Applied elliot wave analysis to measure wave lengths and identify major trends. Studied economic data of money supply M1 and M2 of USD, save ,EU M2 , for eurodebt cris 2009-2014. There seems to be a strong correlation between trend changes when recension starts to complete, real economic value is paid of with non-inflated fiat currency. Increased money supply to lower debt is a common strategy for banks. Once supply overload hits or real economic income occur there's a correction, in other words, no match between inherent value of fiat money -- real value is not matched with forex valuation -- being supplied and demand, which is worth more than fiat currency valuation due to real income produced or inflated fiat money, being paid for in fiat money.

If you want to compare economic analysis, compare USD M1 / M2 with index set at end of economic recesion or increased supply in percentage at time periods of recension. There's one important observation, the velocity of money have increased due to technology and globalisation, a quicker match between supply of value and demand for economic income production occurs today. Meaning, correction is accelerated and occurs almost immediately, previous recessions have had a delayed correction.

In conclusion, inflation have less meaning than you would expect. Although fiat volume and velocity of transaction, is a factor in determining the supply and demand of EUR and USD, long term growth in 2024-2030, where supercycle wave 5 corrects, have larger impact on the evaluation. Price of energy, knowledge, health and demographics are more important factors. Oil and diesel will continue to have a huge efficiency and is likely to increase in value. USD inverse relation to oil will have increasingly less meaning. According to Smil V amongst other economist, are natural gas , solar power, hydropower (not wind energy or nuclear power) very efficient energy sources, even more so than oil if scaling them up. Electric vehicles will not be as efficient as diesel cars, most efficient will fuel cells be if scaling up. Real economic income will be allocated at larger market segments, who have access to them, will produce economic income in relation to spending and cost of energy. Technology in terms of advance technology aimed at US and EU market will reach a bottle neck, labour and energy is cheaper abroad, why income production will occur abroad, namely Eurasia. Industry 4.0 will have deflationary pressure on inflation , cost of labour will decrease since it is less labour intensive and foremost dependent on knowledge and energy. Bearing in mind US global financial and institituonal networks USD demand will increase more than EURUSD during this age hyperglobalisation. Inflation will have importance, even considiring US debt and stimulus packages. Rather you can expect more of stimulus packages, since USD is the most efficient token of value, due to trust and institutional networks, not only to avoid recession but also to spur growth. Transaction cost of bitcoin and altcoins are too high in terms of energy, or there's legitimacy issues. Paying in gold , silver and other metals is very ineffecient and not apt for 21th centuary. Hence, you may look at nasdaq growth in to relation treasury yields for USD fair value. Increased value of gold is temporary and is not so much a hedge against inflation as an indication of distrust fraught with sinking treasury yields. US will attempt to increase value of dollar by increasing cost to uphold it's legitimacy, through political and technological means, or limit global supply which will have a deflationary pressure on USD inflation . There's really no alternative, which is as efficient and legitimate; although, US politics employ USD and financial institutions as a weapon, it's the best global token of payment. FED will keep printing money to alleviate debt and negative economic pressure longer than you may expect.



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