Thread: Closed: Discuss EUR/USD News with a DailyFX Analyst

Originally Posted by Krismitt

I would have added you to this list Asher.....

Regards.

You're right. I didn't notice. My bad.

If anyone refers to me as an expert, I must add:

"Do as as say not as I do" LOL

Thanks Rickos, I soon have to rush out for another doctor's appointment but will try to wrap my head around it when I have time.

I will probably leave some sell orders for cable and AUD/USD, I reckon we can get them at sligthly better prices.

And yes, Cody, we miss you.

Not only dollarbull but where is Bigwave????

Originally Posted by rickos69

C'mon Cody, show your face. Quit lurkin. I know you're out there!!

And where did DollarBull disappear to?

Qed, you there??

Guilder???

Se1????

Stryker??????

Is anybody there???????

my chart for tonight and tomorrow

sorry but have been concentrating on my trading as the past couple days have been just awesome for scalping..

I'm already in for a Long Position from 1.4145, just a short term intraday trade.

Good luck to all.

Hi Asher,

May I ask what you're targeting? I am waiting for AUD/USD 0.832025 and cable 1.6550 for shorts. Might have to leave a sell order as progress seems to be slow.

chart 2

take your 20 to 30 pips and be happy off these majors, days like the last 2 do not come along often and tomorrow will be a game changer not only for fiber but Sterling as well...very important day tomorrow

put your pivots on the charts and plot your Fibs and its a very clear picture for now...tonight

prettiest one of them all is aussie.....add fibs pivots and trade the major S/R points from the previous sessions highs and lows off a 5 min chart, bank your 20 to 30 pips and look elsewhere...

all of these have been doing the same thing the past couple days...look at the previous sessions highs and lows and trade off them using nothing but fibs and pivots and swing points

Hi Melbgirl,

I'm long today with E/U, G/U and A/U. Also a Short trade for USDCHF. Don't know about the targets itself but here are the immediate Resistance lines I'm looking at:

E/U: 1.4190 and 1.4230
G/U: 1.6525 and 1.6580
A/U: 0.8322 and 0.8350

Shorting USDCHF towards Support Lines at
U/C: 1.0795 & 1.0739

Target is around 300 pips between all these pairs.

There is one thing I wanted to mention here about why my Trades are bit different (in direction) to some others here on the forum. I think the reason is that since I'm in Australia, I can only trade on Asian and Early London time hours and not on NY times. Most of the times, I'm taking profits from the aftermath of NY breakouts which is more like the consolidation phase but not bad for making few quick pips.

Hope that helps Melb,
Good luck once again.

Originally Posted by melbgirl

Hi Asher,

May I ask what you're targeting? I am waiting for AUD/USD 0.832025 and cable 1.6550 for shorts. Might have to leave a sell order as progress seems to be slow.

Thanks Asher, that makes perfect sense.

with the news coming out tomorrow I will be surprised to see the dollar get stronger.
The budget balance is expected to double..., the rest I have already posted my thoughts and reasons on the dollar and nothing has changed. The only reason we may see any strength from this is if we are once more treated as though we are deaf blind and dumb which you cant count out from the Feb.

trade smart

A rickos special

0217 GMT [Dow Jones] Fed not ready to start monetary policy tightening just yet, says Stephen Jen, chief currencies investor at BlueGold Capital Management. Notes Fed likely to keep in mind Japan's 2000 failure to make clean break from quantitative easing - it reversed decision 8 months later - and cautious exit strategy under Greenspan in 2003. Also, reckons last week's BoE extension of UK quantitative easing indicates developed economies "likely to remain easier than many may think." Then, there's also Bernanke's job security issue - "if Chairman Bernanke wants a job change, there is no quicker way to do this than to tighten now to undermine U.S. equities." In general, Jen expects risk-based rally to resume in short term

Originally Posted by CodyB

A rickos special

0217 GMT [Dow Jones] Fed not ready to start monetary policy tightening just yet, says Stephen Jen, chief currencies investor at BlueGold Capital Management. Notes Fed likely to keep in mind Japan's 2000 failure to make clean break from quantitative easing - it reversed decision 8 months later - and cautious exit strategy under Greenspan in 2003. Also, reckons last week's BoE extension of UK quantitative easing indicates developed economies "likely to remain easier than many may think." Then, there's also Bernanke's job security issue - "if Chairman Bernanke wants a job change, there is no quicker way to do this than to tighten now to undermine U.S. equities." In general, Jen expects risk-based rally to resume in short term

Fed Is Unlikely to Raise Rates, But Could Boost Confidence
Published: Tuesday, 11 Aug 2009 | 1:15 PM ET By: Jeff Cox
CNBC.com

The Federal Reserve most likely won't be delivering any rate hikes at its meeting this week, but it can deliver something many investors are looking for: hope.

As Wall Street seeks to hold on to a stunning 50 percent rally off its March lows, the Federal Reserve's take on the economy's strength and what looms ahead will be watched closely. The Fed will be releasing its statement Wednesday at 2:15 pm after concluding its two-day meeting.

"Right now we're at another phase — the stabilization phase. It's an inflection point," said Quincy Krosby, general market strategist at Prudential Financial Services. "The one thing the Fed does not want to do is abort the recovery."

Some gentle words of encouragement could help rejuvenate a market that has pulled back over the past several trading days due to profit-taking and concerns about the economy's strength.

"Are they going to say that growth is gangbusters? No, they're not going to say that," Krosby said. "But they must acknowledge that we have moved into a more stable situation."

The economy itself continues to show conflicting signs. While the unemployment rate has taken a mild downturn, most economists think the slight dip was only temporary and joblessness will rise more before it falls.

At the same time, the latest National Federation of Independent Business survey saw confidence slipping among its members, while consumer confidence actually grew in August, according to another survey.

Amid such uncertainty, investors may turn to the Fed for something a bit firmer to grab onto.

"Raising interest rates now would potentially stifle whatever recovery we have going," said Peter J. Tanous, president and director of Lynx Investment Advisory in Washington, D.C. "The market would like to hear some optimism."

Waiting for Rates to Rise

Hiking the central bank's key lending rate from its current target of zero to 0.25 percent indeed would be one way the Fed could put the brakes on the current rally. The market slump that led stocks to lose more than half their value from October 2007 to March 2009 was created largely from a crisis in liquidity, and any measures to cut the flow of money likely would be deadly to the rally.

To be sure, though, there's a strong sense that the Fed will begin tightening at some point, the main question being when that will happen.

The language from Wednesday's statement could be the first clue.

"Just by the wrong words, just by a tilt in their statement, they can have the market already start tightening for them," Krosby said. "Until the Fed believes that we have turned the corner on unemployment, I think that they're going to be very, very careful with their words."



It's not that the market doesn't know what's coming. In fact, most portfolio advisers know that within the next year or so rates are likely to go up, perhaps significantly.

Some think the seeds for a rate increase could be planted at this week's meeting.

"We don't think they'll raise but we do think that they'll signal they would like to raise, and probably begin to towards the end of this year," John Lekas, CEO at Leader Capital, said in a CNBC interview. Lekas said he sees the rate hitting as high as 7.5 percent by the second quarter of 2011.

"When the Fed starts raising interest rates, which probably won't be until the middle of next year, they've got a long way to go and will perhaps surprise people by how quickly they move up," added Michelle Girard, senior economist at RBS. "We think we'll be at 5 percent by the end of 2010 and continuing to move higher somewhat in 2011."

There's actually some belief that until the Fed starts hiking rates, Wall Street won't be paying much attention to the central bank.

"I don't expect any surprises out of them," said Michael Cohn, chief investment strategist at Atlantis Asset Management in New York. "I think it's kind of a non-event."

When the Fed does start raising rates again, though, it will mean two things are happening: the economy is accelerating again, and the central bank is in fact concerned that it could become overheated.

If nothing else, that surely will be a point when investors will pay heed.

"When the market perceives the Fed has a decision to make, that decision will be to raise interest rates," Tanous said. "Then the Fed will be important."

This is No Recession: It’s a Planned Demolition
Mike Whitney
August 11, 2009

Credit is not flowing. In fact, credit is contracting. That means things aren’t getting better; they’re getting worse. When credit contracts in a consumer-driven economy, bad things happen. Business investment drops, unemployment soars, earnings plunge, and GDP shrinks. The Fed has spent more than a trillion dollars trying to get consumers to start borrowing again, but without success. The country’s credit engines are grinding to a halt.

Bernanke has pulled out all the stops.

Bernanke has increased excess reserves in the banking system by $800 billion, but lending is still slow. The banks are hoarding capital in order to deal with the losses from toxic assets, non performing loans, and a $3.5 trillion commercial real estate bubble that’s following housing into the toilet. That’s why the rate of bank failures is accelerating. 2010 will be even worse; the list is growing. It’s a bloodbath.

The standards for conventional loans have gotten tougher while the pool of qualified credit-worthy borrowers has shrunk. That means less credit flowing into the system. The shadow banking system has been hobbled by the freeze in securitization and only provides a trifling portion of the credit needed to grow the economy. Bernanke’s initiatives haven’t made a bit of difference. Credit continues to shrivel.

The S&P 500 is up 50 percent from its March lows. The financials, retail, materials and industrials are leading the pack. It’s a “Green Shoots” Bear market rally fueled by the Fed’s Quantitative Easing (QE) which is forcing liquidity into the financial system and lifting equities. The same thing happened during the Great Depression. Stocks surged after 1929. Then the prevailing trend took hold and dragged the Dow down 89 percent from its earlier highs. The S&P’s March lows will be tested before the recession is over. Systemwide deleveraging is ongoing. That won’t change.

No one is fooled by the fireworks on Wall Street. Consumer confidence continues to plummet. Everyone knows things are bad. Everyone knows the media is lying. Credit is contracting; the economy’s life’s blood has slowed to a trickle. The economy is headed for a hard landing.

Bernanke has pulled out all the stops. He’s lowered interest rates to zero, backstopped the entire financial system with $13 trillion, propped up insolvent financial institutions and monetized $1 trillion in mortgage-backed securities and US sovereign debt. Nothing has worked. Wages are falling, banks are cutting lines of credit, retirement savings have been slashed in half, and home equity losses continue to mount. Living standards can no longer be bandaged together with VISA or Diners Club cards. Household spending has to fit within one’s salary. That’s why retail, travel, home improvement, luxury items and hotels are all down double-digits. The easy money has dried up.

According to Bloomberg:

“Borrowing by U.S. consumers dropped in June for the fifth straight month as the unemployment rate rose, getting loans remained difficult and households put off major purchases. Consumer credit fell $10.3 billion, or 4.92 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $5.38 billion in May, more than previously estimated. The series of declines is the longest since 1991.

A jobless rate near the highest in 26 years, stagnant wages and falling home values mean consumer spending… will take time to recover even as the recession eases. Incomes fell the most in four years in June as one-time transfer payments from the Obama administration’s stimulus plan dried up, and unemployment is forecast to exceed 10 percent next year before retreating.” (Bloomberg)

What a mess. The Fed has assumed near-dictatorial powers to fight a monster of its own making, and achieved nothing. The real economy is still dead in the water. Bernanke is not getting any traction from his zero-percent interest rates. His monetization program (QE) is just scaring off foreign creditors. On Friday, Marketwatch reported:

“The Federal Reserve will probably allow its $300 billion Treasury-buying program to end over the next six weeks as signs of a housing recovery prompt the central bank to unwind one its most aggressive and unusual interventions into financial markets, big bond dealers say.”

Right. Does anyone believe the housing market is recovering? If so, please check out this chart and keep in mind that, in the first 6 months of 2009, there have already been 1.9 million foreclosures.

The Fed is abandoning the printing presses (presumably) because China told Geithner to stop printing money or they’d sell their US Treasuries. It’s a wake-up call to Bernanke that the power is shifting from Washington to Beijing.

That puts Bernanke in a pickle. If he stops printing; interest rates will skyrocket, stocks will crash and housing prices will tumble. But if he continues QE, China will dump their Treasuries and the greenback will vanish in a poof of smoke. Either way, the malaise in the credit markets will persist and personal consumption will continue to sputter.

The basic problem is that consumers are buried beneath a mountain of debt and have no choice except to curtail their spending and begin to save. Currently, the the ratio of debt to personal disposable income, is 128% just a tad below its all-time high of 133% in 2007. According to the Federal Reserve Bank of San Francisco’s “Economic Letter: US Household Deleveraging and Future Consumption Growth”:

“The combination of higher debt and lower saving enabled personal consumption expenditures to grow faster than disposable income, providing a significant boost to U.S. economic growth over the period. In the long-run, however, consumption cannot grow faster than income because there is an upper limit to how much debt households can service, based on their incomes. For many U.S. households, current debt levels appear too high, as evidenced by the sharp rise in delinquencies and foreclosures in recent years. To achieve a sustainable level of debt relative to income, households may need to undergo a prolonged period of deleveraging, whereby debt is reduced and saving is increased.

Going forward, it seems probable that many U.S. households will reduce their debt. If accomplished through increased saving, the deleveraging process could result in a substantial and prolonged slowdown in consumer spending relative to pre-recession growth rates.” (”U.S. Household Deleveraging and Future Consumption Growth, by Reuven Glick and Kevin J. Lansing, FRBSF Economic Letter”)

A careful reading of the FRBSF’s Economic Letter shows why the economy will not bounce back. It is mathematically impossible. We’ve reached peak credit; consumers have to deleverage and patch their balance sheets. Household wealth has slipped $14 trillion since the crisis began. Home equity has dropped to 41% (a new low) and joblessness is on the rise. By 2011, Duetsche Bank AG predicts that 48 percent of all homeowners with a mortgage will be underwater. As the equity position of homeowners deteriorates, banks will further tighten credit and foreclosures will mushroom.

The executive board of the IMF does not share Wall Street’s rosy view of the future, which is why it issued a memo that stated:

“Directors observed that the crisis will have important implications for the role of the United States in the global economy. The U.S. consumer is unlikely to play the role of global “buyer of last resort”— other regions will need to play an increased role in supporting global growth.”

The United States will not be the emerge as the center of global demand following the recession. Those days are over. The world is changing and the US role is getting smaller. As US markets become less attractive to foreign exporters, the dollar will lose its position as the world’s reserve currency. As goes the dollar, so goes the empire. Want some advice: Learn Mandarin.

SAGGING EMPLOYMENT: A “no new jobs” recovery

July’s employment numbers came in better than expected (negative 247,000) lowering total unemployment from 9.5% to 9.4%. That’s good. Things are getting worse at a slower pace. What’s striking about the BLS report is that there’s no jobs-surge in any sector of the economy. No signs of life. Outsourcing and offshoring are ongoing, and downsizing is the new path to profitability. Businesses everywhere are anticipating weaker demand. The jobs report is a one-off event; a lull in the storm before the layoffs resume.

Unemployment is rising, wages are falling and credit is contracting. In other words, the system is working exactly as designed. All the money is flowing upwards to the gangsters at the top. Here’s an excerpt from a recent Don Monkerud article that sums it all up:

“During eight years of the Bush Administration, the 400 richest Americans, who now own more than the bottom 150 million Americans, increased their net worth by $700 billion. In 2005, the top one percent claimed 22 percent of the national income, while the top ten percent took half of the total income, the largest share since 1928

Over 40 percent of GNP comes from Fortune 500 companies. According to the World Institute for Development Economics Research, the 500 largest conglomerates in the U.S. “control over two-thirds of the business resources, employ two-thirds of the industrial workers, account for 60 percent of the sales, and collect over 70 percent of the profits.”

… In 1955, IRS records indicated the 400 richest people in the country were worth an average $12.6 million, adjusted for inflation. In 2006, the 400 richest increased their average to $263 million, representing an epochal shift of wealth upward in the U.S.” “Wealth Inequality destroys US Ideals”

Working people are not being crushed by accident, but according to plan. It is the way the system is supposed to work. Bernanke knows that sustained demand requires higher wages and a vital middle class. But what does he care. He’s not a public servant. He works for the banks. That’s why the Fed’s monetary policies reflect the goals of the investor class. Bubblenomics is not the way to a strong/sustainable economy, but it is an effective tool for shifting wealth from one class to another. The Fed’s job is to facilitate that objective, which is why the economy is headed for the rocks.

The free market is a sham to conceal the crimes of the rich. Read Taibbi. Read Marx. Karl, not Groucho.

The financial meltdown is the logical outcome of the Fed’s monetary policies. That’s why it’s a mistake to call the current slump a “recession”. It’s not. It’s a planned demolition.

Thanks for the articles, it's astonishing but I believe true. Unfortunately though we all know where Marx's ideas took the other half of the world. There seems to be no escape from this vicious circle. Basically 10% of the people anywhere stand to benefit and as traders we are also trying to be in that 10%.

The first article was going to be dollar negative but other issues meant that only the yen was the winner on the day- once again. (while it's supposed to weaken on the Japanese fundamentals) Because of the risks that the pound is facing in the next few hours, I am unsure of my next move. EJ is oversold but somehow it doesn't seem like a good idea to count on a bounce.

I would like to advise caution for today and watch the SP500 Future Index quite closely if you wish to trade any pair with USD in it.

Here is my latest analysis of SP500 Market.

SP500 has struggled around the Intermediate Resistance Area around 1007. We did see the Index reaching as high as to 1010.58, however the Bears then quickly came in and took control of the market and what we have now witnessed is an Almost a Harami Pattern Candle on Monday which was then confirmed by the next day’s Candle on Tuesday.

So far, it looks like that we’ve entered into a Short-Term Downtrend and if the market continues to drop further we’ll be looking at Support Lines identified in the chart, such as 956 and anywhere between 950 and 930. Its also important to note that on Daily chart, the index dropped below the Tenkan-Sen Support line in the last few hours which was not a positive development.

However, on 4-Hours chart, it shows that the Index was able to find a Support on its Kijun-Sen line and during today’s trading these levels must be watched closely to determine whether or not a new Downtrend will continue further.

In terms of overall Bias, we’re still trading above Kumo on both timeframes (daily and 4H) and also the Tenkan-Sen Kijun-Sen Cross is Bullish, which means further continuation of Uptrend can not be ruled out as yet. If prices continue to appreciate the Top of 1010.58 should be watched closely.

Good luck.