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Trump vs China. EUR/USD & Gold forecast and analysis for 01 – 05 January, 2019

Happy New Year! Wish you all a lot of profits in 2019 and may all your dreams come true!


I know there are a lot of rumors now. And almost all of them are related to Mr. President – Trump. Well. I think January will be even more funny. But remember, it’s only noise. None of them will have immediate effect on the markets or be able to change money flow nearest time.


However, let’s talk about the hottest topic. Next month Pakistan will be launching Yuan based bonds to fund its debt. This country also wants to pay Chinese exports through those bonds to reduce dependency on the dollar.


Why Pakistan is so important? – Did you forget about its unique position in silk road? Besides, it’s another reason for US/China competition.


You know Trump sleeps and dreams to fire Powell. He also wants dollar back on the gold standard to counter the Yuan. To keep it all simple, the problem of dollar with gold backing is it’s important export balance. And that’s where and why we see the Trade war. Trump’s plan to back the dollar with gold standard can’t be successful unless US export is higher than import.


Anyway, don’t expect all these fundamentals will have much effect on money flow, at least over short term. So, let’s have a look at EUR/USD technical analysis. A lot of noise on smaller TF. I think because of the end of the year and some profit booking. That’s why we have to pay more attention to the daily chart. 



I think we are in the Phase B of accumulation by Wyckoff. That’s why we expect one more leg down to form Spring. This forecast is valid till the price is under 1.15200. Above this level, we will see Whyckoff break up. I think price will form ABCDE structure, where C – 1.12700, D – 1.13500, E – 1.11200. From E level market should finally take a long term run to 1.2000 and break out of trading range on daily TF.


I got many questions last week about gold. It’s making last wave up as per my previous forecast. If you want to trade Gold now, focus on scalping. I think in 2 weeks or so we will get an entry for swing shorts with 1140 as target. This level will be also buy point. So, I may say we are in a big range on the weekly chart.


 


Good luck and good trading!