Hi, on Monday it is a Bank Holiday in the UK as it is the funeral of Queen Elizabeth II. After 70 years on the throne, which has covered the period from when the British Empire was the biggest in the world, to the UK now becoming an also-ran on the world stage.

Historically all empires come to an end. Could the $USD be approaching the tipping point where it may no longer be the reserve currency of the world and the power that goes with it?

Earlier this year I sold all my surplus €uros & Gbp and put into $USD as a hedge against inflation.

That turned out to be a good deal as both dropped.

I gained so far around 14% which just about equals the real inflation rate here in Europe!

However, as per the video below, I do believe that the USD will eventually lose its status as the reserve currency.

That’s not to say it will happen tomorrow but it looks increasingly likely it will happen & much sooner than I previously thought. If pushed I usually say “by 2035/2040.” Now I suspect it could be in this decade. What is speeding up the demise are the BRICS countries.

I saw a US economist the other day stating “it will never happen. Russia is too small an economy.”  He is missing the point. The BRICS countries (currently Brazil, Russia, India, China, & South Africa) make up over 40% of the world’s population. Add in many Arab states who previously moved off the $ and more joining, seemingly every week, it won’t be long before its 50%+. We are talking about resource/commodity-rich countries, that are all interconnected with China’s new Belt and Road initiative.

A lot of countries already started to move away from the $US in the last 10 years or more, preferring to trade oil for example in their own currencies. Whilst the US is focusing its energy on trying to kill cryptocurrencies, the BRICS countries are taking positive steps (for them).  China has been buying up influence and huge swathes of land in Africa, Arabia, and South America. Land that is generally resource-rich as well as able to grow crops (food and commodities in other words).

The Chinese plan for 100’s of years ahead.

Whilst western politicians focus on the next 4 years,

the priority is to stay on the gravy train and get re-elected!

Below is an interesting video that makes many valid points to suggest the demise of the $USD will happen, what do you think? If you agree what steps are you going to take to protect yourself financially?

In the video, I explain that if you are fortunate enough to have more than 6 figures in cash, why you MUST NOT exceed your government’s guarantee limit. Even then they might change the rules in the future if there is a meltdown.

This is what happened in Cyprus (part of the EU) in 2013:

https://www.reuters.com/article/us-cyprus-banks-idUSKBN1K3242

This is what is happening in Lebanon right now where folks are resorting to robbing their banks to try to get their hands on their own money! Lebanon Bank Hold Ups amid Capital controls

I posted this in the forum on Thursday: …………”Shared from my investing group Telegram: …Gold dropping, broke significant area. I have just bought (not trading/non leverage) more at $1667. It is currently sat on my monthly 55ema at $1655. If that goes could be a bigger drop. Fundamentals convince me this will only be temporary. as ever not financial advice AND this may not bounce now, might be months…. better than having it in FIAT being inflated away for me… As ever I am NOT a licensed financial adviser, just sharing what I am doing………….

Also have orders at 1550 and 1500 …around the covid low of March 2020″……….also I will consider another nibble at $1600. silver not dropped much but could be a “squeeze” and delayed reaction”

Interesting video here that explains a lot of what I believe is currently happening around the world.  I have been saying for the last 10 years that day would come, however, I was thinking 2035…. I am beginning to think it could happen a LOT sooner and then a LOT quicker:

Regarding the Chinese: Get Googling and check out how many ports around the world, including the USA’s, which are part of the Chinese web of influence. It is quite scary and at an advanced stage.

Ultimately I don’t want to stay in USD too long, so gold is the ultimate safe haven. Now some gold buffs are permanently bullish on gold, but like all markets it’s cyclical and it is a poor investment more times than not. I do believe that we are on the cusp of such a cycle, hence my entry back into this market in the last 12 months.

I also talked in the video about inflation and hyperinflation. The subject I discussed in detail in my crypto webinar back in October 2020. Here is the current world league table, not a pretty sight especially for those living through it:

https://tradingeconomics.com/country-list/inflation-rate-

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You can also follow me on Twitter https://twitter.com/marcwalton

The Forex Week Ahead

There is the UK and Japanese Bank Holidays on Monday which will probably lead to lower liquidity. There is then a ton of red flag news during the week. The biggest is FOMC. Many of you made profitable trades last week on the Chf despite the big news. My best advice is do not do that this week with FOMC nor the Gbp on Thursday. The GBP could swing wildly in both directions as I explained in detail in the video.

Here is a good article about the GBP for the week ahead:

https://www.dailyfx.com/forex/market_alert/2022/09/16/British-Pound-Forecast-GBPUSD-Slumps-to-a-37-Year-Low-Ahead-of-the-BoE.html

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MAJORS

Despite my comments about the USA above (it will not happen overnight), my fundamental bias is still $ strength versus all majors. As ever keep watching the $ index for clues.

Remember I am looking for “A” grade trades from weekly & daily charts that I can place the orders and then just walk away.

EUR/USD: Bias is only to short, but once again it has stopped at parity. That is not the place to enter but if the price pulls back then I do want to short it. The first place to consider is1.0130. If I catch it I will take 70% profit at 1:1 then leave the balance to run in the hope of a bigger move down. I suspect the €uro could hit 0.90cents in the coming months. Having said that if there is a permanent ceasefire in Ukraine that could give it a temporary rebound.

USD/CHF: Worked yet again last week for 150+ pips  Historically I have never trade it much but we have had a lot of winners this year helped by following the $Index. I will watch it once more for clues. I am looking to Long this pair at 0.95100 & 0.9485 now (split the risk in half) as explained in the video.

GBP/USD: I only want to short. but not where it is now. It stopped to the pip at the Covid low after spiking below. That was the lowest it has been versus the $ for almost 50 years! Again it’s quite probable it will go lower BUT I need a pullback. An A grade for me is way back at 1.1800 and a B grade at 1.1700

AUD/USD: Not for me at the moment but its worth watching on the 4 hour around 0.6900

NZDUSD: An A grade will be around 0.6500 but its a long way. Intraday you could watch 0.6200 on the daily & 4 hour for clues to short it.

USD/CAD:  After 2 years it finally broke and closed above the major area of 1.300. I am interested to long at 1.3010. If it drops lower then 1.2950 is the next area. If it does do a massive drop then 1.2900 is also an area to long for me.

CROSSES

EURGBP: Looking to long at 0.8610. Fundamentally it makes little sense as the €urozone is in a similar mess, but that’s where the charts say take it! Do not touch it on Thursday until ALL the GBP news is out.

EURCAD: A grade for me is miles away at 1.3700. Intraday I would watch 1.3390 both to short.

EURNZD: Interesting on a Daily to short at 1.6750 and long at 1.6570. I prefer the latter.

EUR/AUD: Messy now but 1.4800 is worth watching for a possible long BUT fundamentally the Aussie economy is in a better condition. I would feel more confident taking a short if it breaks lower. If I take it long, then 1.1.4940 will be my target which is a daily trendline with the 200ema just above it.

NZFCHF: 0.6200 is now the major area but its unlikely to get there this week. 0.5900 is also an area to watch on a 4 hour chart.

GBPNZD: I have a forward order to short at 1.9320.

AUDCAD: Short around 0.9090/split and other half at to 0.9060,

AUD/NZD: I don’t like this pair. Only interested to long 1.1100 & 1.1020 are areas to consider

GBP/CAD: 1.5390 is an A grade for me.

GBP/YEN: I never trade this but was asked by a member to take a look. 160.60 to 161.30 is the “zone”

AUD/YEN: Looks more concrete to long at 91.65 but also a long way off now (hey in forex ANYTHING can happen so always make a “what if it does plan”!

CAD/CHF another one a member asked me to look at 0.7350 is the start of the zone.

As always, remember correlation!

We are NOT a “tipping service” our aim is to teach you how to trade for yourself.

Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):

Regards

Marc

Kind regards,

Marc