In a previous post on May 23th (link) I pointed out to the €/$ cycle, signaling the chance of a top in the next 2-3 weeks.
Unfortunately that didn't happen.
EurUsd continued to rise and it's close to important resistance levels (between 1,15 and 1,17).
As I often wrote, I am a Dollar bull on the long term, because I don't believe the euro could last as we know now, without having a deep crisis before (I fear with Italy involved).
a) Macron eliminated the short term euro-break up fear
b) Macro data are better in Euro area than in the US
c) Trump has pleasure with Dollar weakness that helps US stocks as well, while Draghi hasn't been complaining so far about euro strength (maybe he'll say something this week at ECB meeting?)
d) technically it doesn't look as toppish.
As you can see, in the previous two highs (red arrows), both weeks always had a spike with reversal. It hasn't yet, I'll wait for it before adding discretionary dollar exposure.
This is the perfect moment for euro, even if it's becoming a crowded trade. Net long euro speculator positions are high, but not at record level. I fear the rebound will finish with position quite close at record level, not excluding a new one. That would be the final signal of exuberance.
In the meantime, I continue holding my exposure on Dollar in portfolio without adding it, continuing holding sterling as well (without adding because after last UK elections they fooled themselves) and I was stopped on short eurjpy position.
In summary, maybe you can use me as contrarian indicator if you believe, but I won't consider adding $ in my portfolio now, because I already have them and want a contrarian technical signal before. I admit that if I was "dollar cleaned", I'd consider buying something between 115-117 without reversal as well (but not full position)
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