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

Originally Posted by Robert Eckert

So I was stopped out of EUR/USD shorts and am glad to be flat for the weekend. Will short EUR/JPY instead: euro is still in awful shape but I don't want to bet on the dollar to be any better; somebody in Japan spent a lot of forex depreciating the yen during the Friday panic (Bank of Japan and Finance Ministry both deny doing it, but somebody did and I bet it was on their behalf) but I doubt it will be a sustained campaign. Yen just has to get stronger, euro has to get weaker, while dollar doesn't have to do anything and might jump any which way; EUR/JPY looks like the best pair to trade.

Be careful, Robert. Your arguments towards shorting EURJPY seem reasonable. However, the daily chart's last bar shows a long lower shadow, which could be indicative of a correction up (likely temporary). The 14 period RSI also shows the pair is oversold.

Hi fellow traders,

I must say I'm glad that, at-least in this forum, there seems to be a divergence of views as to where the Euro heads in the short term, relative to the dollar. That's healthy, because a 100% consensus short view almost always results in a contrarian bounce (i.e herd mentality hurts) - at least from my experience in the equity markets over the last decade.

A few interesting points to note: The june Euro calendar (forget the U.S econ calender for a sec) is replete with financial mines and economic pot-holes. June 4th begins the IMF review of Spain's balance sheet, perhaps explaining why Geithner has flown over considering the U.S contributes c. 17% of the IMF's loan book. 6th June - interest rate announcement (a cut could result in further Euro weakness). 7th you got a Spanish bond auction, 10th brings the first round of the French legislative election, 12th you have an ALL important Greece Bills auction (5 days before the elections), 13th you have a new timeline set by Germany ratifying the ESM and fiscal compact....

I could go on...

The point is, you have had 2 major dead-cat-bounces in the last 9 months in the Euro vs. the Dollar. The first one commenced 6th October 2011 and lasted about 3 weeks. It was solely triggered by the ECB's LTRO announcement. That was the jumbo event. The EUR rose from 1.31 to c. 1.41 in a period of 3 weeks. This trade murdered some shorts as the bounce was very swift and pronounced.

However, the 2nd bounce happened over a c. 6 week period between Jan 15th-Feb 28th 2012 and was marred with volatility owing to policy indecision and many political events on both sides of the Atlantic (Mr. Eckert - perhaps you can add some color here as to why the bounce was so volatile). During said bounce (which btw was of similar magnitude as the October 2011 one), one could have easily shorted on strength and made a killing. Our trader did.

Given the granularity of the economic calendar in June, with so many things that could go wrong, it is my personal view that if we get a bounce, it is likely to be similar to the Jan-Feb 2012 one; only given the sharp deterioration in economic conditions now (vs. in Q1 2012), the magnitude of the bounce may be more limited, however. Perhaps 1.25-1.27.

Having said that, again in my personal opinion, June is an 'edge of the precipice' month which could push the Euro below 1.20. Bulls see the June calendar events as opportunities for politicians to surprise on the upside; I see the alignment of events in June as a rich Molotov cocktail - each one a domino, waiting to be pushed.

Midas

Originally Posted by jamilgaruty

hello pipstars 007, am wondering if we are in a correction or reversal ?
the answer is we are in correction as long as we trade below that 2600 level what do you think !!
on the break of mentioned level(bulls hope) look to build up for 2800 level on the break of it (bulls power) look for 3500 as a potential sell chances there ..
remember the levels correction phase with sell potential ...
1- below 2600 bearish
2- above 2600 bullish to 2800
3-below 2800 bearish
4- above 2800 acceleration to 3500
5- 3500 a great great barrier for bulls to breath
untill then i'll upload my charts but the week i'll be so busy guys i hope i can do my best for us to get a better market insight and discuss or levels .
later........

nice levels, i have similar levels in play except for the 1.28 to 1.35 level. thats very unlikely unless we have a new trend on a weekly TF.

let me explain

on a larger time frame, (daily & weekly) the momentum of this pair is still down. from passed price action that you see with the chart below, (a daily snapshot)...... as long as the trend continues down, price should respect the monthly pivot that sits at 1.2660 and head lower (give or take 50 pips that can cause a blow off higher then move back down) for a new low. check it out for your self's with the monthly pivot and passed price action/ do some back testing with the pivots (they are great let me tell you)



the only time price does not respect the pivot and we get alot of side ways action is when we are in a retracement of the larger degree trend. if this is the case and we manage to break above the monthly pivot and find support then we might have a picture like this ( but dont forget, price has to stall by 1.3 which is a strong resis area.



but from what i see, this is less likely. if what you say, and price from 1.28 goes to 1.35, something major needs to happen. there is really really strong resis smack on the 1.3 level and for that to break some major good news needs to come out of europe.
if what you say will happen, then price most likely will change direction and the EUR will head back up to 1.4 which i do not see for the time being with all the crap that Europe is facing and will continue to face in the near future. only a clean break above 1.3 will signal a trend change.
till then, i look for the most likely places where price will find resis to continue this trend lower.
except for the support that price is finding now @ 1.2290, i have lower down @ 1.2070 and a big gap to 1.1709/00.

(also if u look at the lower picture, check out the macd moving average line with its blue support line. a break below the blue trend line will be even more bearish for EUR.

anyways good week

The 1 Hour chart from June 1, 2010 shows the quick waterfall down to multiple lower Bollinger Bands support (green rectangle), followed by the spiker up to the upper BB20. The price action then traded back and forth from the upper to lower bands, producing lower highs. The lower high at the upper BB20 when the bands had squeezed together signaled the final waterfall down to the ultimate reversal low (green ellipse) which occurred at the lower BB60 which was above the lower BB20 .

Originally Posted by rcopadilla

The 1 Hour chart from June 1, 2010 shows the quick waterfall down to multiple lower Bollinger Bands support (green rectangle), followed by the spiker up to the upper BB20. The price action then traded back and forth from the upper to lower bands, producing lower highs. The lower high at the upper BB20 when the bands had squeezed together signaled the final waterfall down to the ultimate reversal low (green ellipse) which occurred at the lower BB60 which was above the lower BB20 .

The current situation also shows a spiker up after the price action hit multiple lower Bollinger bands (green rectangle). There is a confluence of upper bands which should provide resistance to normal price action. An abnormal price action could be a spiker up to the 1hour 250EMA and/or the 1hour BB300 midline, producing a lower high than that which printed on May 27 (red ellipse). In any case, the move should be faded as lower lows are expected ahead.

so many views... (especially bullish)
as long as we trade under the 1.245 i consider the trend is still bearish looking for lower targets.

Also my opinion is that the economic calendar has a bad euro forecast this week?
and with the greek elections in a few days...

I think we could be a little bit bullish for 2 or 3 days, and then bearish till greek elections heading for the 1.19 or 1.16 level and then make the correction to higher levels.

I could be wrong, I'm especially curious about the opening later on today.

A,B,C now?

The Asian markets were mixed on the week for a net loss of 0.6%.
The European markets were all lower on the week losing 3.7%.
The Commodity equity group were all lower and lost 1.9%.
The DJ World index is also downtrending losing 2.7% on the week.
COMMODITIES
Bonds had an historic week, as 10 yr yields dropped to an all time low of 1.44%. The 30 year did likewise hitting 2.51%. For the week the uptrending bonds gained 1.4%.
Crude continued its downtrend losing 8.2% on the week. It has now dropped 26% from its spring high of $110.55. Previous spring selloff declines have been between 21% and 34%.
Gold was lower on the week until friday when it soared nearly $60. Friday was its best daily percentage gain since early 2009. For the week it gained 3.1%.
The USD continues to uptrend gaining 0.6% on the week. But it currently displays a negative divergence at extremely overbought levels. The EUR lost 0.7%, and the JPY rallied 2.2%

Eur/Usd had a fifth consecutive week of losses as the situation in Spain is deteriorating quickly winning more negative attention than Greece and Italy. The upcoming week at the beginning of the new month is quite busy, with a rate decision by the ECB being the highlight. Will the central bank step up to stabilize the situation?

Hmmmm Robert??

I think not myself

Italy paid a very dear price in the latest bond auction, and it is certainly unsustainable. Spain is getting too close to some kind of a bailout as the capital flights continues. In Greece, money isn’t waiting for the polls either, the state’s coffers are running dry as Greeks defer tax payments and even providing electricity is becoming challenging., The implications of a Grexit for the European banking system and for other countries are not fully priced in.
a coordinated action by central banks can certainly reverse the situation. Also a US/UK style QE blitz by the ECB. Is the ECB up for the challenge? At least now, the answer is no.
In the US, the situation has definitely worsened, but QE3 is still quite far as it is becoming clear that it will not help the economy. The US weakness can just add to the “flight to safety” that boosts the greenback........................................................

SP500
From a fibonacci perspective SP500 1291 represents a 50% retracement of the entire uptrend from 1159-1422 which we broke and closed under Friday. The next retracement support would be the 61.8% level or 1259. Resistance is now at the 1291 and 1303 pivots. Short term momentum is quite oversold. The short term charts remain with a negative bias from SPX 1323, with the positive swing point now around 1310

USDX 81.75 should see stops now old R now support for a run up to 83.65 again and then 85.01..here is your key to the EU moves.

US Dollar Index
The dollar is proving scarce, even after the Federal Reserve flooded the financial system with an extra $2.3 trillion, as the amount of the highest-quality assets available worldwide shrinks.
From last year’s low on July 27, the greenback has risen against all 16 of its major peers. Intercontinental Exchange Inc.’s Dollar Index surged 12 percent, higher now than when the Fed began creating dollars to buy bonds under its extraordinary stimulus
measures at the end of 2008. International investors and financial institutions that are required to own only the highest quality assets to meet investment
guidelines or new regulations are finding fewer options beyond dollar-denominated assets. The U.S. is one of only five major economies with credit-default swaps on their debt trading at less than 100 basis points, meaning they are viewed as almost risk
free. A year ago, eight Group-of-10 nations fit that category, data compiled by Bloomberg show.

Eur/Usd starts lower this week again. 1.2873 is the previous 2011 low set in January, and it is distant resistance now. This is a very strong line separating ranges, as also seen in May 2012. 1.2814 is now stronger after being a clear line separating ranges in May 2012.
1.2760 is a pivotal line in the middle of a trading range seen earlier.. It provided support early in the year and is now of high importance. 1.2660 was a double bottom during January and the move below this line was confirmed after a struggle.
1.2623 is the previous 2012 low and remains important, now as resistance. Attempts to rise above this line have been met with very strong resistance. Weekly PP sits at 1.2632 close by. Below, 1.2587 was a clear bottom on the weekly charts but is only minor resistance now.
The round number of 1.25 is of psychological importance, and it is stronger now as resistance. 1.2460 is minor resistance after stopping a euro rally in June 2012.
1.24 It provided some resistance in June 2010 and is now still minor support. Further below, 1.2329 is another historical line after being the low (october) following the global financial meltdown in 2008 and my target for last week. 1.2286 is a new minor line of support after being the swing low in June 2012 last week.
1.22 is minor support below, after serving as such in June 2010.
1.2144 is already a very strong line on the downside: it was a clear separator two years ago, when Greece received its first bailout. The round number of 1.20 is of course highly important in the psychological level.
Below, the 2010 low of 1.1876 is apparent, before the launch value of the euro at 1.17 to the dollar in 1999.
I expect any recovery now to be once more stopped at the 2623, it has proven to be very strong support turned resistance and stopped the most recent rally. Will reevaluate on a sustained break of this.

Target is now 1.2144. then 1.2070-40.

Monthly and weekly charts are still completing a pattern that will take us to 1.30ish before under 1.2 and will update those charts as needed.
I have a buy limit at 2150 same as last week on strong multi year support where we can expect to see a bounce with an open objective. Stops to be determined if and when we approach.
I'll short major resistance levels noted above until the weekly and monthly patterns complete for a move back up to 1.30ish before the next low expected towards parity at which time we should have the new look of the Euro in whatever form it takes. It will then be time to sell the dollar. TF for all this is still TBD but will update as it happens. Thats what I see now and how I will trade this week and beyond.
Trade smart and let the market come to you.



I will be looking for another long at 1.2329 again as it is still strong support even tho it has been broken. Stops and target TBT

will trade what the market gives me as always. Find your price and wait for the market to come to you

I am bearish GU
I am bearish NU
I am bearish AU

Originally Posted by CodyB

The Asian markets were mixed on the week for a net loss of 0.6%.
Target is now 1.2144. then 1.2070-40.

I am bearish GU
I am bearish NU
I am bearish AU

CodyB - You're truly a Diamond class reporter. Thanks for such informative and concise preview. Really appreciate it.

Something else to consider on Sunday open. Most pairs will move towards the neutral point of fridays move (Pivot) at open. Not all of them will get there but most will head there. If they are more than 25 pip away I'll take a a small position in that direction stop determined by momentum.

watch this for a few weeks and see for yourself.

Originally Posted by Robert Eckert

So I was stopped out of EUR/USD shorts and am glad to be flat for the weekend. Will short EUR/JPY instead: euro is still in awful shape but I don't want to bet on the dollar to be any better; somebody in Japan spent a lot of forex depreciating the yen during the Friday panic (Bank of Japan and Finance Ministry both deny doing it, but somebody did and I bet it was on their behalf) but I doubt it will be a sustained campaign. Yen just has to get stronger, euro has to get weaker, while dollar doesn't have to do anything and might jump any which way; EUR/JPY looks like the best pair to trade.

The only problem I see is that where one Yen pair goes the others follow. Maybe not at the same rate.

Originally Posted by EuroTraderApp

Hi fellow traders,

Having said that, again in my personal opinion, June is an 'edge of the precipice' month which could push the Euro below 1.20. Bulls see the June calendar events as opportunities for politicians to surprise on the upside; I see the alignment of events in June as a rich Molotov cocktail - each one a domino, waiting to be pushed.

Midas

EuroTraderpp - Thanks for this preview report. I like to see Euro heading towards 1.20 because I shorted it and will be laughing if it hits this level. Your report gives me confidence of the position I had taken. Thanks

Originally Posted by CodyB

The Asian markets were mixed on the week for a net loss of 0.6%.
The European markets were all lower on the week losing 3.7%.
The Commodity equity group were all lower and lost 1.9%.
The DJ World index is also downtrending losing 2.7% on the week.
COMMODITIES
Bonds had an historic week, as 10 yr yields dropped to an all time low of 1.44%. The 30 year did likewise hitting 2.51%. For the week the uptrending bonds gained 1.4%.
Crude continued its downtrend losing 8.2% on the week. It has now dropped 26% from its spring high of $110.55. Previous spring selloff declines have been between 21% and 34%.
Gold was lower on the week until friday when it soared nearly $60. Friday was its best daily percentage gain since early 2009. For the week it gained 3.1%.
The USD continues to uptrend gaining 0.6% on the week. But it currently displays a negative divergence at extremely overbought levels. The EUR lost 0.7%, and the JPY rallied 2.2%

Eur/Usd had a fifth consecutive week of losses as the situation in Spain is deteriorating quickly winning more negative attention than Greece and Italy. The upcoming week at the beginning of the new month is quite busy, with a rate decision by the ECB being the highlight. Will the central bank step up to stabilize the situation?

Hmmmm Robert??

I think not myself

Italy paid a very dear price in the latest bond auction, and it is certainly unsustainable. Spain is getting too close to some kind of a bailout as the capital flights continues. In Greece, money isn’t waiting for the polls either, the state’s coffers are running dry as Greeks defer tax payments and even providing electricity is becoming challenging., The implications of a Grexit for the European banking system and for other countries are not fully priced in.
a coordinated action by central banks can certainly reverse the situation. Also a US/UK style QE blitz by the ECB. Is the ECB up for the challenge? At least now, the answer is no.
In the US, the situation has definitely worsened, but QE3 is still quite far as it is becoming clear that it will not help the economy. The US weakness can just add to the “flight to safety” that boosts the greenback........................................................

SP500
From a fibonacci perspective SP500 1291 represents a 50% retracement of the entire uptrend from 1159-1422 which we broke and closed under Friday. The next retracement support would be the 61.8% level or 1259. Resistance is now at the 1291 and 1303 pivots. Short term momentum is quite oversold. The short term charts remain with a negative bias from SPX 1323, with the positive swing point now around 1310

USDX 81.75 should see stops now old R now support for a run up to 83.65 again and then 85.01..here is your key to the EU moves.

US Dollar Index
The dollar is proving scarce, even after the Federal Reserve flooded the financial system with an extra $2.3 trillion, as the amount of the highest-quality assets available worldwide shrinks.
From last year’s low on July 27, the greenback has risen against all 16 of its major peers. Intercontinental Exchange Inc.’s Dollar Index surged 12 percent, higher now than when the Fed began creating dollars to buy bonds under its extraordinary stimulus
measures at the end of 2008. International investors and financial institutions that are required to own only the highest quality assets to meet investment
guidelines or new regulations are finding fewer options beyond dollar-denominated assets. The U.S. is one of only five major economies with credit-default swaps on their debt trading at less than 100 basis points, meaning they are viewed as almost risk
free. A year ago, eight Group-of-10 nations fit that category, data compiled by Bloomberg show.

Eur/Usd starts lower this week again. 1.2873 is the previous 2011 low set in January, and it is distant resistance now. This is a very strong line separating ranges, as also seen in May 2012. 1.2814 is now stronger after being a clear line separating ranges in May 2012.
1.2760 is a pivotal line in the middle of a trading range seen earlier.. It provided support early in the year and is now of high importance. 1.2660 was a double bottom during January and the move below this line was confirmed after a struggle.
1.2623 is the previous 2012 low and remains important, now as resistance. Attempts to rise above this line have been met with very strong resistance. Weekly PP sits at 1.2632 close by. Below, 1.2587 was a clear bottom on the weekly charts but is only minor resistance now.
The round number of 1.25 is of psychological importance, and it is stronger now as resistance. 1.2460 is minor resistance after stopping a euro rally in June 2012.
1.24 It provided some resistance in June 2010 and is now still minor support. Further below, 1.2329 is another historical line after being the low (october) following the global financial meltdown in 2008 and my target for last week. 1.2286 is a new minor line of support after being the swing low in June 2012 last week.
1.22 is minor support below, after serving as such in June 2010.
1.2144 is already a very strong line on the downside: it was a clear separator two years ago, when Greece received its first bailout. The round number of 1.20 is of course highly important in the psychological level.
Below, the 2010 low of 1.1876 is apparent, before the launch value of the euro at 1.17 to the dollar in 1999.
I expect any recovery now to be once more stopped at the 2623, it has proven to be very strong support turned resistance and stopped the most recent rally. Will reevaluate on a sustained break of this.

Target is now 1.2144. then 1.2070-40.

Monthly and weekly charts are still completing a pattern that will take us to 1.30ish before under 1.2 and will update those charts as needed.
I have a buy limit at 2150 same as last week on strong multi year support where we can expect to see a bounce with an open objective. Stops to be determined if and when we approach.
I'll short major resistance levels noted above until the weekly and monthly patterns complete for a move back up to 1.30ish before the next low expected towards parity at which time we should have the new look of the Euro in whatever form it takes. It will then be time to sell the dollar. TF for all this is still TBD but will update as it happens. Thats what I see now and how I will trade this week and beyond.
Trade smart and let the market come to you.



I will be looking for another long at 1.2329 again as it is still strong support even tho it has been broken. Stops and target TBT

will trade what the market gives me as always. Find your price and wait for the market to come to you

I am bearish GU
I am bearish NU
I am bearish AU

Your report does make it look like you DO trade for a living. Good luck!!!
I have backtesting that indicate it is very possible to double trading capital weekly.
It only takes 10 doubles to make $1K to over $1M.

Originally Posted by stryker

We may have achieved a lot and than again we may have achieved Nada...
I have looking at euro charts and though we closed higher to min 2380 and we closed higher to 2410 but we failed to close higher to the bear channel range top.. rather we never got to test it on Friday, though we got close to it..
I have scenario on EURO for next week, starting with the strongest one in my opinion and coming down to the weakest one..

1.. Euro will gap higher opening above 2450 and most likely will maintain the gap for a move to 2550..This makes euro bullish on charts and though a break higher to 2450 would ease the pressure off selling, yet this resis which then should turn resis is the top of the bear channel and hence such would be declining and not exactly the kind of supp you want since instead of getting a higher lows, we would be getting lower lows.. A break higher to 2550 or above the T5 on 8 hr charts would be ideal for proper staging a rally and the tgt on the even if corrective is early 2800's...
2.. No gap opening and we holds 2450 on ASIA for a grind lower but holds on to the 2394-2400 supp and break higher to 2450 resis in EU session for a move to test 2550.........
3...We don't hold 2390ish and would see the price decline to 2330-40 and make a base formation for a lift higher to retest 2350..
4.. 2450 resis holds out and we don't have a gap opening...........we are likely to consolidate initially b.w 2340-2450...would expect consolidation to last 1-2 days and the range to get deeper to the south side possibly upto 2320ish b.4 a lift higher..

I still have to do the USD chart but as long as USD stays higher to 10135, it could bounce back .. Though main supp on it for Monday comes to around 10155-60.....
In short.......... Imp for EURO to break higher to 2450 and test 2550 on Monday... that would be ideal for the bull camps....... If we are not breaking higher to 2450-60..... the risk back to test the yrly lows would then be a greater possibility...

GL..

I like this best of all

Regardless - Caution from here on...

if ever there was a time for these words it is now

Originally Posted by CodyB

at what risk does this happen?

here is something else to look at Attachment 131046

What version of Excel created that file? My version can't display it properly.