As the entire world laughs in disbelief at the fact that the US may actually elect Donald Trump the markets are yet to figure out that an untested, emotional, ego-maniac, reality show star that’s allegedly indebted to authoritarian dictators who are unfriendly to the US may not be the best thing for the US Dollar.
We can all admit that Obama’s weakness and lack of any real foreign policy created a vacuum that merely allowed opportunistic thugs such as Putin fill the void. Now we have an increasingly dangerous geopolitical situation. Unless the world is too busy posting selfies to Instagram to notice the creeping acceptance worldwide of dictatorial regimes and their invasions/occupations a real war may be required to clean up the mess.
Sadly, a real war with Russia in the next few years would actually not be the worst scenario if you figure the alternative would be to allow Putin to continue gaining strength, seizing lands and paying off Western European politicians to gain favor within their foreign policies. In this scenario a war would still be inevitable but the West would unfortunately be fighting a much stronger opponent having given Putin the time to build a better position. A Trump presidency assures this worst case scenario and markets are about to figure this out.
The closer the US gets to actually electing this guy the more the markets will move out of what will be increasingly uncertain USD assets. Today’s increasingly bullish European PMI’s is another side of this..but honestly for me it’s just a bonus as the larger logic for the trade is laid out here.
Long EURUSD. Technically a higher floor developing on the daily. Monthly confirming as well and showing 1.38 or so in price sometime over the next year.
The best charting teacher I know: