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

Originally Posted by Robert Eckert

Jesus Christ. Who is buying euros now? It is less insane than a month ago, but still you have to change $8 to get enough euros to buy what you could have gotten for $7 and kept $1 in your pocket, and at every level of risk you get worse return than in any other currency, including outright negative return if you want safety; the entire continental economy is collapsing, and the currency itself will have to be repudiated soon by at least one, probably several nations. But every time the price threatens to move toward sanity, the tulip mania starts again. Can anybody explain this to me?

I am not so sure people are buying the euro: I mean you might have some speculators playing the dead-cat-bounce, but what you are seeing here since last week's NFP is a) strong dollar weakness on the effects QE3 would have on the Greenback b) certain degree of short covering on the Eur/Usd in anticipation of the G7 "emergency" call. There has been no fundamental change in the fact that the situation is worsening daily. I maintain, June is an "edge of the precipice" month and that disaster will strike first, before the Eurocrats (Eckertology now in my mind) bring out a bazooka, albeit a diluted one.

Re: halting of trading in Euros over a weekend to allow for a major systemic event such as the Grexit is almost as improbable as Berkshire Hathaway loading up on Gold ETFs. You have had temporary short bans on key financials (equities) amidst the sub-prime collapse but these bans were on market caps that represented less than 10% of the global equities traded volume. To halt trading in Euros would require immense coordination with the Bank of International settlements and given the excessive amounts of option expiry dates on such a weekend, a repricing of options would need to occur swiftly (especially the implied volatility and time value components), barrier hedges used by companies to mitigate receivables risk owing to currency fluctuations would need to be renegotiated all together resulting in a sharp rise in vol.

Originally Posted by CodyB

long term charts I posted last week do show a possible move back to 1.3ish area before the next big leg down to near parity where I think we will see the new look of the euro in whatever form it takes. I'm not that versed as you in completely understanding all that is happening but dont think we will see the EU break up, rather a new look will emerge from all of this. I am clueless of the hows or in what form but thats how I see it. Those same LT charts have a pattern still unfinished for that to happen.

The price just shot up 30 pips in under 3 minutes. Then it crashed back down in the next 3 minutes. There was nothing whatsoever happening, so far as could be seen, to cause this (Australia is about to announce its rate change, which has been priced in to AUD for a while-- so? does that have anything to do with euro? I don't get it). This kind of thing bothers me. Some big boy playing games? Trying to hit everybody's stop-losses with a head fake up before shoving it back down? I was thrown out but immediately put shorts back in, good thing I was awake.

A "new look" euro trading stably in the 1.10-1.20 range would be fine: but it requires a functional ECB, with a charter that allows it to respond to economic conditions and not to mechanically aim at inflation-suppression at all times, and to have banking regulation under its control, as opposed to this separate EBA entity going off on its own tangent; in short, it needs to be more like the Fed; and allowing all the member states to issue their separate bonds without regard to each other's fiscal policies cannot be tolerated anymore, even though surrendering that power is a major loss of sovereignty; in short, they need to be more like the American states. The problem is that such a major revision of the European Union's treaty structures takes time: and time has already pretty much run out. It doesn't need to happen soon; it needs to have already started happening. I am just amazed and appalled at how long the leadership has thought they could get away with procrastinating the hard decisions.

Angela Merkel has been skewered as being Hitlerian, but I am starting to think the more appropriate analogy is to Chancellor Bruning, who thought in the 1929-1932 period that the appropriate response was strict austerity and contraction of the money supply, even when it became plain the policy was making everything worse (and was more stubborn about it than President Hoover in the US, who gets rather a bum rap from the historians). Of course, Germany is not going to be the country that falls into the deepest depression (it will go down last, when all the other countries have stopped having any purchasing power for German products) and would not be the country to elect extremist parties in response to it (the memory of the 30's and 40's will not go away in Germany for a long long time). But in other countries the whiff of Weimar has gotten very strong during this crisis. I hope there is still time for muddle-through; I am just feeling very unnerved of late.

Originally Posted by Robert Eckert

The price just shot up 30 pips in under 3 minutes. Then it crashed back down in the next 3 minutes. There was nothing whatsoever happening, so far as could be seen, to cause this (Australia is about to announce its rate change, which has been priced in to AUD for a while-- so? does that have anything to do with euro? I don't get it). This kind of thing bothers me. Some big boy playing games? Trying to hit everybody's stop-losses with a head fake up before shoving it back down? I was thrown out but immediately put shorts back in, good thing I was awake.

A "new look" euro trading stably in the 1.10-1.20 range would be fine: but it requires a functional ECB, with a charter that allows it to respond to economic conditions and not to mechanically aim at inflation-suppression at all times, and to have banking regulation under its control, as opposed to this separate EBA entity going off on its own tangent; in short, it needs to be more like the Fed; and allowing all the member states to issue their separate bonds without regard to each other's fiscal policies cannot be tolerated anymore, even though surrendering that power is a major loss of sovereignty; in short, they need to be more like the American states. The problem is that such a major revision of the European Union's treaty structures takes time: and time has already pretty much run out. It doesn't need to happen soon; it needs to have already started happening. I am just amazed and appalled at how long the leadership has thought they could get away with procrastinating the hard decisions.

Angela Merkel has been skewered as being Hitlerian, but I am starting to think the more appropriate analogy is to Chancellor Bruning, who thought in the 1929-1932 period that the appropriate response was strict austerity and contraction of the money supply, even when it became plain the policy was making everything worse (and was more stubborn about it than President Hoover in the US, who gets rather a bum rap from the historians). Of course, Germany is not going to be the country that falls into the deepest depression (it will go down last, when all the other countries have stopped having any purchasing power for German products) and would not be the country to elect extremist parties in response to it (the memory of the 30's and 40's will not go away in Germany for a long long time). But in other countries the whiff of Weimar has gotten very strong during this crisis. I hope there is still time for muddle-through; I am just feeling very unnerved of late.

Here is part of what I work from everyday and subscribe to. I have access to all the major banks releases. its basically a complete market recap heading into FF LO and the US markets of yesterdays moves.

Market Briefs * G7 to hold emergency teleconference to discuss EZ woes - Jiji. * Japan FinMin Azumi - No comment on whether G7 will release statement after   teleconference, concerns over global growth higher, common G7 understanding   necessary - Reuters. * Asia G20 official - G20 to encourage fiscally capable countries to boost   spending, Germany and Canada especially, not informed of call on EZ - Reuters. * RBA - Lowers OCR 25 bps to 3.5%, many eyed 50 bp move, cites more moderate   China growth, weaker Europe, sentiment deteriorated, scope for more   accommodative stance, inflation likely towards base of target range. * Australia Q1 c/a deficit A$14.9 bln, as eyed, impact of net exports on GDP   -0.5%, -0.7% eyed, government spending +0.5% at A$79.93 bln. * Australia May AIG/CBA PSI +3.9 points to 43.5. * Australia May new vehicle sales +21.5% m/m, +24.1% y/y Looking Ahead - Economic Data (GMT) 07:13 ESP May PMI services  index, 41.6 eyed; last   42.1. 07:43 ITA May PMI services  index, 41.8 eyed; last   42.3. 07:48 FRA May PMI services  index, 45.2 eyed; prelim 45.2. 07:48 FRA May PMI composite index; prelim 44.7         07:53 GER May PMI services  index, 52.2 eyed; prelim 52.2. 07:58 EUR May PMI services  index, 46.5 eyed; prelim 46.5. 07:58 EUR May PMI composite index, 45.9 eyed; prelim 45.9. 09:00 EUR Apr retail sales, -0.1 %m/m, -1.1% y/y eyed; last +0.3%, -0.2%. 10:00 GER Apr industrial orders, -1.0% m/m eyed; last +2.2%. 14:00 USD May ISM non-mfg index, 53.5 eyed, IFR 54.0; last 53.5. Looking Ahead - Events, Auctions (GMT) UK holiday - Queen Diamond Jubilee, Denmark Constitution Day. N/A   Emergency G7 conference call likely on economic/market developments. N/A   EU Van Rompuy, Dutch PM Rutte meeting at the Hague. N/A   EU Rehn, Sweden FinMin Borg, ECB Asmussen, IMF Lagarde at Riga conference. N/A   Italy 4-year BTP Italy auction (second day). N/A   Belgium 3/6-mo Tsy certificate, Malta 91/182-day T-bill auctions. 07:00 Riksbank Gov Ingves speech in Stockholm. 09:30 ECB 7-day refi tender at fixed 1%, E50 bln allotment eyed, last E51.2 bln. 11:00 Dallas Fed Fisher speech in St. Andrews, Scotland. 13:00 BoC monetary policy announcement. (See North American Open for a detailed listing of US/NorAm releases, events.) Currency Summaries USD/JPY and the JPY crosses were again in consolidation mode. Sentiment was less risk-off however, and this resulted in a less nervous session. With London again closed tonight for the Queen's Diamond Jubilee, there was very little interest to trade. Most players lay in wait for more news, possibly some from a G7 teleconference scheduled for later today. USD/JPY was supported by higher US yields, demand at today's Tokyo fix and short covering interest. It traded a tight 78.28-40 range. Bids are seen solid from around 78.00 and trail down to 77.65. Topside stops above 748.65, 78.75, 79.00 and 79.15 are being eyed by specs. EUR/JPY and other crosses were supported by lower Spain and Italy and higher Germany yields. EUR/JPY was better bid in a 97.87-98.27 range, holding above its Ichimoku tenkan line at 97.95 for most of the day. GBP/JPY, AUD/JPY and NZD/JPY traded 120.38-71, 76.07-55 and 59.14-56 pre-RBA. AUD/JPY saw a fresh high of 76.68 post-RBA with many eying a 50 bp OCR cut. It fell back thereafter however. EUR/USD opened in Asia at 1.2500 after getting a boost from reports that EZ policy makers are set to take decisive action to tackle their sovereign debt and banking crises. Many also looked to cover ahead of a G7 teleconference. From 1.2493, short covering saw EUR/USD up to 1.2542. EUR/JPY buying out of Tokyo helped as did gains on a number of Asian bourses. Sellers camped between 1.2550-70 capped the topside. Despite today's recovery, selling rallies towards 1.2650 remains the favored strategy. GBP/USD did little in a tight 1.5376-1.5409 range with London closed again tonight for the Queen's Diamond Jubilee. EUR/GBP was bid up again, up from 0.8123 to 0.8140 on short-covering with sentiment less risk off. It eased back later. USD/CHF fell back some more from 0.9614 to 0.9578 with sentiment less risk off and USD on the back foot across a broad front. EUR/CHF remained stuck between 1.2010-14. AUD/USD opened in Asia at 0.9729 and traded up from 0.9715 to 0.9790. Modest short covering was seen early on reports of an emergency G7 teleconference and an AFR piece suggesting the RBA may sit on its hands today. Trading around 0.9750 pre-RBA (0.9716-72 range ahead), it inexplicably fell to 0.9715 only to rocket up to 0.9790 post-RBA. The accompanying statement justified the rate cut but was not overly dovish. AUD/USD later fell back to around 0.9760 with intra-day longs and shorts squeezed out. NZD/USD opened in Asia at 0.7555 after getting a boost late in the US day on short covering on news of a G7 teleconference to address the EZ crisis. Short covering continued in Asia with Asian bourses mostly in the black. Stops above 0.7595 were taken out and a high of 0.7605 seen before it fell back to 0.7575. Stiff resistance topside is seen between 0.7650-80, and rallies to this area are still eyed as selling opportunities. Other Asset Markets The Nikkei opened small gap up at 8331.02, and from an early low of 8306.93, rose to 8364.34 before falling back. At 8333.68, it is up 38.05 points on the day. Other Asian indices are also mostly up with the Hang Seng up 0.54%, KOSPI a larger 0.81% and Sen--- 0.42% after its open. The Shanghai Composite is trading just below par on the day. JGBs fell back. The 10-year auction did not go well but the market as a whole weathered this well. Euroyen futures were flat in low-volume trading. The yield on the benchmark 10-year JGB is indicated at 0.840%, up from yesterday's 0.815% close. The front futures trades 143.56, down 23 ticks after a 143.47-68 range. March '13 Euroyen futures last traded at 99.675, unchanged from yesterday's close.

The price just shot up 30 pips in under 3 minutes. Then it crashed back down in the next 3 minutes. There was nothing whatsoever happening, so far as could be seen, to cause this (Australia is about to announce its rate change, which has been priced in to AUD for a while-- so? does that have anything to do with euro? I don't get it). This kind of thing bothers me. Some big boy playing games? Trying to hit everybody's stop-losses with a head fake up before shoving it back down? I was thrown out but immediately put shorts back in, good thing I was awake.

while the cut was priced in its the statement that the market reacts to. Look at the AU same time as the move you saw on the EU and you'll see why this happened.

see ya'll in a few hours

BTW I am long stop at 2466 for a move towards 2630 risk 1%
that didnt work, dumped as soon as I went to bed, alarm went off telling me it was a loss

Originally Posted by trend2

dear cody B
OK TO RESPECT THE S/R BASED ON PA FIBS&PP'S , WHAT DOES MEANS

i think it means you need to learn to trade before you trade - so its off to pipschool you need to go

Simple 8 hrs and slightly illustrated 2 hrs..
2560-65 needs to break or we head lower..
2490-93 current decent supp for EU session sliding lower to 2486-88 for NA session..
A hold of current highs generally implies we to see 2450 coming into play........
A break under the lower supp and we lose this up momentum formed by euro.....

USD and well 4 hrs is showing a possible HNS with tgt to 10125 .. neck at around 10186-90..
30 mins also suggest we to try out 10190.. 8 hrs is more subdued kinda , but I think will go with 4 hrs and a break under 10170 of 8 hrs would quantify the fact that we have broken the neck on the HNS on it..
Looking at this scenario euro and other pairs possibly could rally..Else 10186-90 most likely to hold out on USD for a push higher..
So stay caution at these lvls..


GL..

HELLO PIPSTARS 007, CAN WE ALL AGREE THAT THE EURO IN SHORT TERM UP TREND !!!
CAN WE ALL AGREE THAT THE EURO IS STRONGLY BEARISH ON THE LONG TERM ASPECT !!!
CAN YOU JUST GET THE POINT !! REMEMBER THAT LEVELS I TALKED ABOUT (BELOW 2600 WE ARE BEARISH).
HERE YOU GO GUYS MY SHORT TERM 30M CHART TO GET INSIGHT OF THE PROBABILITY
Attachment 131397

With 2455-58 now holding risk is on to the downside for a move under 2437 to head to 2390-2398 under to it..
I'm glad i have hedge shorts in from 2538..
though never got the chance to add under 2487 but instead had longs from 2490 with stops triggered at 2479...
scalped some longs from 2441 to 2452...
will now be buying around 2398-2402..

GL..

I can't wait till Rob and Eric (Wong) awake to see the Euro weakening again .

When draw-downs turn to gains - better than s e x.
Midas

The 5min 50EMA(gray line) kept providing support for the bounces up until the time that it did not. The break of support produced the waterfall. Is it done? No lower lows have been produced.
Will it go straight down? Bounce attempts should be sold.

hello!!
Well i wanna thank you all for your analysis it's helping me a looot. I did a stuupid move i longed in 2456 but now i am afraid that mai 22th may repeat itself and continue on the bearish move all week. what do you think?

Originally Posted by EuroTraderApp

I can't wait till Rob and Eric (Wong) awake to see the Euro weakening again .

When draw-downs turn to gains - better than s e x.
Midas

lol... nice one.. Watch out for the USD.. the green TL if ends up holding you can see a whole reversal.. Perhaps you only getting better prices for long play..
Not saying it is going to be like this.. Only stating a high scenario probability..

GL...

Originally Posted by EuroTraderApp

I can't wait till Rob and Eric (Wong) awake to see the Euro weakening again .

When draw-downs turn to gains - better than s e x.
Midas

i hope they wake up before b heads off to c

or if AB = CD - we may be nearing C

closed most here

Originally Posted by stryker

lol... nice one.. Watch out for the USD.. the green TL if ends up holding you can see a whole reversal.. Perhaps you only getting better prices for long play..
Not saying it is going to be like this.. Only stating a high scenario probability..

GL...

Fully agreed, if going short, play small lot sizes. Am hoping the German Manufacturing Data in 45 min is the fuel we need to crack 1.24 from above...lets hope
Midas