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

Closed my short for a small profit. This doesn't seem like the time to be shorting. It may well drop and ride the TL, or it could reverse. I don't feel confident in either move, so I'm sitting tight for awhile. I'll watch and see which one of you guys has this one nailed.

Originally Posted by nopainnogain

how do i reach you

Sent you a PM

Here's a quick thought. But will it mean anything after 1/1/11?

Originally Posted by MarcusFire

Here's a quick thought. But will it mean anything after 1/1/11?

That's the big question. What mood will the market feel like after 1/1/11? What TF is the chart, so I can track that TL break.

Originally Posted by Bari Baig

How Long will Euros life support work: As we wrote yesterday, it was not just Euro but also GBP which too traced a perfect reversal even when the news was bearish of U.S Dollar however, things are once again different and we’d get to that a little latter as our primary focus today is what we have said many times in the past which being Euro would seize to exist in the future. All the “Foreign” support notably that came from Beijing which we’ve already noted as a self preservation move in our article [Revisit of [Is this the week which brings bad fortune to Euro] dated December 21st and we wrote “Edited note summary: At time of Greek bailout, Chinese delegations increased to Greece which showed Chinese support and this time around China has come in support of whole of Europe and not just one country”. That is one thing; we further went on to say that “Euro is the 2nd largest reserve currency in the book of People Bank of China. The dilemma is Chinese officials are not bullish on either the U.S Dollar or the Euros therefore they must be in the tightest of the fixes one could imagine because neither of the currencies are holding well and weakness in them directly reflects on Chinese reserves. China has no option but to show its support to Europe and also U.S.”

In our article dated November 9th [Euro sins are coming back to haunt it] as Euro was trading near highs of 1.40 we wrote “The number of Euro bulls is too high, and as their collective Longs would run for covers by squaring their positions, this would do more damage than vanilla sellers alone. High 1.33s lie very near then, and “proper” good support lays much lower and just over 1.3000s.” Need we say more? We mustn’t but, we will. The low posted by Euro on November 29th was barely below 1.3000 and now a month later we are pretty much there. Does it mean anything? Does it mean that Euro has found a bottom? No! It is a cooling off phase, it is a breather as we like to call it, and it is the quiet before the storm which is why we have said time and time again strength has to be sold into not bought. In mid November we lowered Euro target to1.25s after the consolidation ended.

So, does it mean it ends there? Because Euro trading to 1.25s shouldn’t raise many eyebrows, No, that is not where it ends, just like we’re in a consolidation right now we’d consolidate at 1.25 and then press on to 1.1875s or lows that were seen in the first week of June 2010. That is when the Bulls of Euro are really forced to revisit their strategies and models. As Euro approaches 1.1875s the move should be swift through the lows and this is where it all boils down too. Surely it is not happening in the last 2 trading session of this year, nor perhaps in the first quarter but we can safely say it will happen in several months and most likely in year 2011. Not good enough? Well, we do not have a crystal ball otherwise wouldn’t have pegged our target on several months. Rather we have a better question, why are we so bearish of Euro to begin with and why have we argued in the past that it shall seize to exits which we stand by even now?

Here goes then, we have argued that material rise of Euro was not because Euro Zone or Euro itself found strength from some [unknown] source but the rise of Euro was due to material weakness in the green back. The on-going issues of PIIGS nations haven’t ended and we have Portugal which is just waiting to break up, we have a bigger giant Spain and it is worrying us even more than Portugal because of the “Tall” claims that have recently started to come at a heightened pace from “High” political offices of Spain.

Media has gone quiet on Euro Zone debt issue but the fact of the matter is Ireland went to IMF/EU to bail its banking system out! What we find very interesting is the fact that earlier in the year when EU carried the banking “stress test” It was then 6 of Spanish banks which failed the test and not Irish yet, Ireland collapsed before. What happens if Spanish banking system goes under as quietly and quickly as Irish did? We’d let that to your imagination. Recently Germans have spoken in full support of Euro and at the same time we noted that nearly half of the German companies see breakup of Euro region as a real threat. Ms. Merkel is in the tightest of spots, earlier this year Ms. Merkel and CDU/FDP “--------- Democratic Union” and “Free Democratic Party” lost the battle of North Rhine-Westphalia in a rather appalling way which has compromised Ms. Merkel’s power severely. Reason was simple, the German people did not want to part take in the bailing out Greeks.

Some say the union would not break because the political time and energy that has gone into the making of it would not be wasted. It does make some sense, but at the same time in recent past the ones who contributed the most are themselves skeptical of its longevity. Germany has grown, France has grown number of other countries have grown/expanded because of Euro Zone union but is this alone to keep dispensing tax payers money to bail the inefficient components of the union? To us it seems they don’t know themselves until when they’d like to support these inefficient components of the union which is why thus far we do not have any concrete steps taken to eradicate the problem altogether. All what has been done thus far is nothing more than a band-aid to get by for a bit longer.

The Union is demographically challenged which again we have brought up many times in the past and if Union seems too big to contemplate than Belgium has exactly the same issues as does the rest of Europe. Belgium has two cultures, people who speak in two distinct languages, which is at the very root of all the political tension and unrest Belgium has seen so far. Best, Belgium is the capital of Euro Zone and whatever is happening in the Capital is what is evident throughout the union. The rift is in North and South, much like how North Italy wants nothing to do with South Italy “because” North Italy practically feeds the South such is again evident in the union. Citizens of Northern countries, work more hours, take lesser holidays each year, have a higher pension age, have lesser perks what the citizens of south enjoy. The breakup of the union might not be on the agenda of the politicians but it sure ranks much higher in the citizens of Northern countries. Why would the German citizen agree to be taxed in order to bear the costs of Greek citizens who have tax evasion rank high up in the favorite past time? Or for that matter the Italians? Why would the Germans, the French or Netherlands want to share the burden with someone from Italy, Portugal or any of the PIIGS with whom they do not share any cultural values and above all who are alien to them because of the most profound thing “Language”.

We could go on but we believe we have said enough. Euro is in trouble and the language barrier is making the problem that much harder. It is only a matter of time, we’d again not quantify precisely when but soon that selling in Euro has everyone running for the cover and when it happens it would be quick and would be full on strike. Until 30 years ago, China had kept its doors closed, when it opened it spread faster than wild fire. Politicians only stand tall until people support them; once the people power goes missing they duck and run! As quoted above, Ms. Merkel lost a very significant battle, how many more can afford to upset their voters and press on? Not many and thus the end seems much sooner now than ever before.

by

Bari Baig

wwwwwwwwooooooooooooooooooo,,,,,,,,zzzzzzzzz ,,,,,there it is.....im asleep

ITD8 could have come this week, as well as MTD10 ( I am working on another chart) But the problem is that technical indicators don't work very well in these choppy, illiquid markets and you can get these spikes up and down for no reason other than someone is trying to get out of positions. I am short here however

Hi Mary

Just a quick Q for you

what are your ITD and MTD indicators? How do they work/how do you read them?

Are they similar to Tom DeMark's countdowns?

Rgds
c-c

Originally Posted by Mary R

ITD8 could have come this week, as well as MTD10 ( I am working on another chart) But the problem is that technical indicators don't work very well in these choppy, illiquid markets and you can get these spikes up and down for no reason other than someone is trying to get out of positions. I am short here however

Originally Posted by c_cubed

Hi Mary

Just a quick Q for you

what are your ITD and MTD indicators? How do they work/how do you read them?

Are they similar to Tom DeMark's countdowns?

Rgds
c-c

intermediate term and medium term delta - deltasociety.com or the Delta Phenomenon. Its a market timing tool based on lunar cycles

~OK

So does the 12th point indicate some sort of med term turn point?

Thanks

Originally Posted by Mary R

intermediate term and medium term delta - deltasociety.com or the Delta Phenomenon. Its a market timing tool based on lunar cycles

Originally Posted by KUTERO

#GbpUsd #EurUsd 4H updated at 1815 GMT #GbpUsd #EurUsd 4H updated at 1815 GMT on Twitpic

Captain: i am looking at a daily EURUSD chart i have it tight together, am looking at a stiletto form ,i think you told us what that meant could you repeat . please. is that a kicker we had today?. thanks

Originally Posted by c_cubed

~OK

So does the 12th point indicate some sort of med term turn point?

Thanks

The end of a cycle and the beginning of a new one

Follow up to our previously posted USD Index chart and the bias towards Dollar’s Weakness …

PS: For previous chart please follow the Quoted Post below

Good luck

Originally Posted by asherewt

USD Index is signaling a possible new Bearish run to come … we’ve just had our Tenkan-Sen / Kijun-Sen crossover on Daily chart but as it happens during the Slow month of December (with low volumes) anything is possible hence caution is suggested …

Daily Chart.

Originally Posted by AyoBro

That's the big question. What mood will the market feel like after 1/1/11? What TF is the chart, so I can track that TL break.

eu update, look set to complete w5 in asian session. Get ready to load short.

I am gearing up for a major move in this pair. and GPB and AUD