- The EUR/USD has fallen again during the trading session on Monday as we continue to drift lower.
- There’s just nothing good to say about the European Union right now, and although I can give you a laundry list of reasons why I don’t like the US economy, the one big thing it has going for it is that it’s not the European economy.
- If that’s going to be the case, this is a market that was the very much in trend, meaning that it is going to go lower.
I believe in any point in time that we see some type of short-term rally, it’s time to start shorting. Thursday features the Consumer Price Index numbers, and a lot of traders will pay close attention to it, as it could give us a bit of a “heads up” as to what’s going on with inflation. If inflation in America is strong, there’s no reason for the Federal Reserve to change its monetary policy. If that is true, the US dollar will continue to act like a wrecking ball against almost everything else, including the Euro which has a whole litany of its own issues.
Europe Running Out of Gas
The European Union is on the precipice of running out of natural gas. The deindustrialization of the European Union was something that I never really thought of because it seemed as if it was a wild stretch. However, here we are. If energy does not get restored to the European Union this winter, I just don’t know how the Euro itself rallies. The central bank will almost certainly do something to try to protect the economy if it does get that bad, but at the end of the day they cannot print jobs, nor can they print energy. If your factories do not have energy to run, they will be producing anything, regardless of how cheap you make borrowing money.
Because of this, I think we have a long and cold winter ahead of us in the European Union, and this is only fully exacerbated by the fact that there seems to be no willingness to compromise between NATO and Russia now, which is the biggest problem that the European space now. It will be interesting to see which European country fractures from the pack first.
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