Upon the 2008 crash, EUR/USD for the month of August lost 1021 pips from 1.5621 to 1.4569 but by October, EUR/USD dropped 3200 pips. Bernanke and the Fed then lowered Fed Funds 50 points, purchased $1.2 trillion in Treasuries, 1.2 trillion in Mortgage securities and 100 billion in Agency debt. Meanwhile, EUR/CHF dropped 3500 pips in 15 minutes and GBP/USD 3000 pips in 3 hours upon the Brexit vote. Stimulus and bond purchases never entered the lexicon. Treasury purchases were done at $75 billion per month yet Yellen refuses to give back $60 billion per month until the Queen sees fit to do so.
Its an imperative to watch the EUR/USD, USD/JPY and EUR/JPY relationship moving forward as the 3 currency pairs will inform long before when the crash will come and how horrific it will be. Its coming and Yellen will lead the charge.
If Bernanke would’ve allowed the market to correct itself in 2008 as all markets do upon any crash event, economics and markets today would’ve been just fine. The 1997 / 1998 crash was also seen from miles as was the EUR/USD and EUR/JPY rise as well as the USD/JPY fall. The next crash is different and will be worse because its engineered by faulty economic and market assumptions.
Measured by historic 50 year market periods since the BOE in 1694 and 1695 for Scotland, 2008 was not only forecasted miles before the actual event but 2018 is the next vital inflection point. Economic life doesn’t improve from today’s vantage point as the 50 year market measures perfectly predicted every market crash, recession and every new market period since 1694 such as Gold periods, 1972 Free float, Bretton Woods 1944, 1908 Knickerbocker bank. The accuracy is not only stunning but what’s coming can’t be stopped because we are in the last period of the free float with only a short time to go before it ends. One can argue its ordained by Leviticus and Jubilee periods.
EUR/USD big break lines today are located above at 1.1370, 1.1400 and 1.1430. EUR/USD is miles overbought done at 1.1452. Below, 1.1300 is big line break and EUR/USD is done at 1.1283.
GBP/USD breaks above are located at 1.2954 and 1.2975 and 1.2996. Below 1.2954 then 1.2924.
GBP/JPY must breaks are located at 146.26 and 146.61. Targets then go to 145.79 or 147.06 and 147.51.