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

Originally Posted by martyman13

This is the second time that news of Greece are moving this pair lower. It's especially effective in contrast to the expectation of the end of QE2 in US. However, QE is the only thing that's keeping US$ alive at this point and without QE, the Dollar will cliff dive to below 72 within a matter of weeks. When QE2 ends in June, it will be followed immediately by QE3, then QE4, and QE to the nth power. Once the news of QE3 come out, the EUR/USD will be back on it's track to 1.6.

I don't really agree with you on that, I think the quantitative easing has been weakening the dollar and when it ends the dollar should strengthen. But I don't know what the central bankers are going to do anymore than anyone else. I hope everyone can keep their pants on during financial crises.

Originally Posted by martyman13

without QE, the Dollar will cliff dive to below 72 within a matter of weeks. When QE2 ends in June, it will be followed immediately by QE3, then QE4, and QE to the nth power. Once the news of QE3 come out, the EUR/USD will be back on it's track to 1.6.

So without QE the dollar falls, and with more QE the dollar falls. Got it.

Originally Posted by SkiBunny

So without QE the dollar falls, and with more QE the dollar falls. Got it.

That pretty much sums it up. QE is used to buy the Treasuries, "supporting" the dollar (or letting it lose value gradually). If QE stops, there will be nobody to buy the US debt, and the dollar will collapse at a MUCH faster rate.

Originally Posted by martyman13

That pretty much sums it up. QE is used to buy the Treasuries, "supporting" the dollar (or letting it lose value gradually). If QE stops, there will be nobody to buy the US debt, and the dollar will collapse at a MUCH faster rate.

Don't agree with this at all. The valuation of the dollar has far more complexity than simply looking at QE. In fact, I disagree to the point I have no energy to offer the numerous points of disagreement

ADDED COMMENT:

Both quotes did not show. I disagree with the concept that the dollar is doomed regardless. Org quote stated with QE dollar falls, without QE dollar falls. With this summation I completely disagree.

Originally Posted by martyman13

That pretty much sums it up. QE is used to buy the Treasuries, "supporting" the dollar (or letting it lose value gradually). If QE stops, there will be nobody to buy the US debt, and the dollar will collapse at a MUCH faster rate.

Suppose the interest rate could rise to attract a buyer. Also aren't the primary dealers obligated to buy.

Originally Posted by stkelrey

ADDED COMMENT:

Both quotes did not show. I disagree with the concept that the dollar is doomed regardless. Org quote stated with QE dollar falls, without QE dollar falls. With this summation I completely disagree.

Mine was a facetious reply (obvious I thought until the OP agreed with it).

Though I expect in a crunch, given the choice between much higher rates or letting the dollar slide, the Fed will choose the latter.
EU problems could give Fed time before being forced to choose.

Originally Posted by martyman13

That pretty much sums it up. QE is used to buy the Treasuries, "supporting" the dollar (or letting it lose value gradually). If QE stops, there will be nobody to buy the US debt, and the dollar will collapse at a MUCH faster rate.

If that were really true, and nobody else would buy US treasuries the dollar would already be much lower and the global economy would be in much worse shape than it already is. the primary goal and objective of quantitative easing is to lower interest rates, and lower the dollar which has had the effect of increasing US exports and stimulating job growth. The concept that the Fed is the only buyer of treasuries is just false. Central bankers and financial institutions around the word buy US debt every day. Right now the most likely scenario is that many of the institutions and banks are waiting to see how the markets will react when QE2 ends.

Originally Posted by SkiBunny

Suppose the interest rate could rise to attract a buyer. Also aren't the primary dealers obligated to buy.


Mine was a facetious reply (obvious I thought until the OP agreed with it).

Though I expect in a crunch, given the choice between much higher rates or letting the dollar slide, the Fed will choose the latter.
EU problems could give Fed time before being forced to choose.

The markets set the interest rates in the long run. The actions of the fed are really temporary . There is an active and liquid market for US debt. If this were not true you would see absolute calamity in the global financial markets the likes of which you have never seen.

Originally Posted by martyman13

...QE is the only thing that's keeping US$ alive at this point and without QE, the Dollar will cliff dive to below 72 within a matter of weeks. When QE2 ends in June, it will be followed immediately by QE3, then QE4, and QE to the nth power. Once the news of QE3 come out, the EUR/USD will be back on it's track to 1.6.

I have the other end of this stick.

QE is crushing the dollar. QE POMO money, as per The Bernank himself, was designed to lift the markets to provide a "wealth effect" to give the illusion of prosperity in order to entice the flow of capital from the pockets of the masses.

Cash into the markets does not provide for flow into cash which weakens the USD. The end of QE will see a mass exodus of equities/commodities and the strengthening of the buck. Overlay a chart if in doubt of the S&P and a cash equivalent. Market up 10%? Cash down 10%. Because the buck has lost value it takes more to buy thus the higher price.

The end of QE will see a nice USD rally. Maybe even an RFH!

Originally Posted by Cosco

1.4268 today at least. Above, moving stops under each previous higher low until it breaks down.
Probable pullback to 1.417 tomorrow.
Bull/Bear fight has begun 10 min ago, but shall break eventually higher.

Reached ! Loving my new program ....

So far so good. Long target met for the day.

Attachment 87662

Takes pride in posting it before it happens. Feels larger than life sometimes, when I'm right, about 50% of the time


Chart Posted yesterday early Asian session:

Originally Posted by Paul Chin

Attachment 87553

Ultimate target: 439+.

Originally Posted by Paul Chin

I've a target as well, prepare since the start of the asian session, but did not post then, don't want to talk countertrend, blah, blah...
Attachment 87516

Now, Trend is your friend. Which trend? hihi... Where's ESKA?????????

Originally Posted by martyman13

This is the second time that news of Greece are moving this pair lower. It's especially effective in contrast to the expectation of the end of QE2 in US. However, QE is the only thing that's keeping US$ alive at this point and without QE, the Dollar will cliff dive to below 72 within a matter of weeks. When QE2 ends in June, it will be followed immediately by QE3, then QE4, and QE to the nth power. Once the news of QE3 come out, the EUR/USD will be back on it's track to 1.6.

Loving the counts!!!!!!!!

Originally Posted by Paul Chin

So far so good. Long target met for the day.

Takes pride in posting it before it happens. Feels larger than life sometimes, when I'm right, about 50% of the time

Nice to see you posting some 'real time' trades again!!!!!!!!!!! I see your focused again, keep up the good work!!! Btw, where was your entry? I couldn't make out where you entered? I was wondering the same about Eska, hmmmmmmmm.

Originally Posted by Cosco

Reached ! Loving my new program ....

Nice job!!!!!!!!!!! I have A=C, from the bottom, at 1.4318. This rally is interesting to me because 4hr is diverged and 4hr 5/21 has crossed long, while 4hr 50ma is going skud missile towards price. Very interesting, this one.

Sidenote.......The proof of dollar's decline during QE is evident. Now with the threat of QE's conclusion, dollar rallies. This I will have to journalized for when history repeats itself, a year or two from now.

Originally Posted by Mary R

The markets set the interest rates in the long run. The actions of the fed are really temporary .

Weren't income taxes also "temporary"? I imagine that many of those now complaining about QE will be begging for it eventually. Little doubt in my mind that later on Mr Benanke and the other Fed doves will oblige, again. There should be some good opportunities just as in the past 3 years.

Originally Posted by SkiBunny

Weren't income taxes also "temporary"? I imagine that many of those now complaining about QE will be begging for it eventually. Little doubt in my mind that later on Mr Benanke and the other Fed doves will oblige, again. There should be some good opportunities just as in the past 3 years.

I don't know because there are many unpredictable factors which influence the central bankers. Nobody really knows how the economy will respond when they stop the quantitative easing, or how other economies in the world will respond. Maybe there will be more natural disasters, or maybe Greece will find $300 billion in gold hidden in a cave in Athens. But if you are absolutely convinced what the US Fed will do months down the line, go for it.

Originally Posted by FXTA

Longed last week at 1.4110 support. The red square area where we previously bounced hard is now playing resistance so watching that area and see if we break through that, if so, will be looking for a move around 1.4400, or max 1.4500 only because the market may decide to touch the previous supporting trend line as resistance before the next move down.

Yes. Looks like has to go up to go down. Still targeting 1.38 but could go to 1.45 first. You were right yesterday Cosco. Yesterday bull daily candle & over bought MacD. Should have taken more notice.

Well looks bullish indeed. 4300 final break as a confirmation that 4285-88 is history..
X tgts around 44XX..
4 hr and 30 mins..
Most likely a move to around 4300 before some stalling... A powerful retr form around here could bring us back to testing 4180-90...
A break higher to 4300 then 4370 and subsequently 4430ish comes into play..

GL...