Gold and silver skyrocket; American stocks roar two or three times more than metals. The markets hope that there will be no recession and the US economy will return to growth in the second half. Perfect, as if nothing had happened.
The only new thing is trillions of dollars printed on the markets in the past three weeks. Stocks rebounded (why not, with 30% unemployment, it’s normal to be bullish), metals skyrocketed, bonds rose, and the only thing that didn’t move was the US dollar .
This is no longer the case – on Tuesday, the EURUSD pair gained more than 1%, trading around 1.0920, and it looks like investors are starting to assess the huge inflation, which is coming soon.
Since there is practically no supply – everyone is sitting at home and no new goods are produced, but the money supply increases considerably; this cannot end other than by high inflation. Which means the dollar should suffer considerably.
The next resistance for the EURUSD pair is around 1.10, and thereafter we can see a rapid rally to 1.1150 or perhaps to the peaks of the current cycle of 1.15. Long-term long positions are well positioned at these levels.