I don't know if I should say this on the Forum it may be the wrong place, but as they say in for a penny in for a pound (or should I say in for a cent in for a Euro). We almost all seem to think the Euro should fall to at least 1.20 because the PIGS are in a mess O.K. we know that. So why should Germany prop up the Euro Zone? The last time the Euro fell below 1.30 the German economy went thru the roof and it will again because the German economy is a strong manufacturing export economy that thrives on a low currency just as the U.S.A. has done so well of the back of Q.E. in fact I think without Germany the Euro would be far lower than it is today so I ask but one question is Germany really propping up the PIGS or are the PIGS suffering because the Euro is far to high based on the influence of Germany. I don't trade fundamentals just trends so I say this just as a soap box issue but of this you can be sure if the Euro keeps on falling and the Dollar keeps on rising bet on the DAX30 and if the Euro keeps on rising and Dollar Keeps on falling bet on the S&P5000, the DJ30 or better still the Nas100. Now that was me on my soap box sorry let's get back to trading !
Long term, Germany's economy also is hurt by overvalued euro, but it has been insulated from the effects for various reasons. Exports are hit less because half of Germany's exports are within the Eurozone. Tourists do come to Germany but this is not nearly as important to the economy as in Greece, Spain, or even Italy. Foreign remittances work the other way: there are many Greeks abroad (some within Eurozone but often in the UK or US) sending money home to their families, which is worth less when the euro is high; in Germany on the other hand, Turks sending money to family in Turkey find that it goes further with high euro, which lets Germans get away with paying them lower wages. Germany is now sliding into recession, as the collapse of demand in the southern economies finally brings the consequences back home.
But it is not exactly "Germany" which is keeping the euro high: although the Lisbon Treaty requiring the ECB to focus on inflation-fighting was written with German sensibilities in mind, chairman Draghi is not German, and neither are a lot of the major players at ECB. The non-Germans as well as the Germans in the ECB have imbibed the culture of keeping the money supply tight, regardless of the circumstances. The LTRO (long-term refinancing option) program of last year was treated in much of the financial press as an equivalent to the QE (quantitative easing) of the US Fed, but it was not; it was coupled with "redeposit" programs in which the ECB induces the banks to park their money in accounts at the ECB, accounts which sit idle: they are not invested in anything, or lent out to anybody. If the simple-minded metaphor for QE is "cranking up the printing presses", the redeposit programs can be simple-mindedly considered "tossing bundles of euros into a bonfire". The SMP (secondary market program) whereby the ECB buys up some sovereign-debt bond paper (they cannot acquire it at the primary auctions, as they are not allowed to lend directly to the governments, but can buy from the holders) was recently resumed after a long hiatus, but similarly its effects were neutralized by a counterbalancing expansion of the "redeposits" to make sure that there is no money in the European economy getting lent to anybody or starting any new businesses. This is intentional, because it is their charter. Can they be persuaded to change tack? The price-index figures are expected to show negative inflation which may provide the ECB with political cover: if there is actual deflation, then since price "stability" is actually what they are told to pursue, shouldn't they now finally be expanding the money supply?
Some hint that this may be in the works came in Obama's press conference a couple hours ago, when he made a rare direct reference to the forex markets, saying it would be unhelpful for major countries to compete in trying to undervalue their currencies. Obama cannot control Bernanke, but there may be a consensus among the fiscal as well as political authorities that the Fed should refrain from any QE to bring down the dollar, and the Bank of Japan refrain from its usual USD/JPY purchases (the "charts" have been saying for a while that we are back to the point in the cycle when USD/JPY should go up again, but BoJ is unusually sidelined) in order to give the ECB room to knock the euro down, if they are finally ready to take it.
In Greece, Venizelos (of the Pasok party) explains the second day of holdup in forming a government as being about the composition of a negotiating team to fight with the Troika over re-doing the terms of the March memorandum. The argument the Greeks are making is that the memorandum was drawn up on economic assumptions that have failed (the rate of GDP contraction accelerated a couple percent-- not coincidentally, in my view, that started with the March shootup in the EUR/USD rate). Angela Merkel continues to be the face of the "Let's let everybody go broke!" policy but is becoming somewhat bypassed. In Egypt, the second day of holdup in announcing results of the Presidential race has led to a re-occupation of Tahrir Square; Hosni Mubarak is in a coma, rumored by some to be dead and by others to be fine and smuggled out of the country as part of a corrupt bargain; the military reaffirms that it will not allow a Parliament to be elected until a new Constitution is drafted (by whom?) so it may not matter much who is President, but if they try to say Shafiq won (independent estimates are Morsi 52-55%, Shafiq 40-43% with about 5% intentionally spoiled ballots) no-one will buy it. Russia ordered a ship full of helicopters bound for Syria to turn around for home, after a visibly tense session between Obama and Putin; Obama avoided publicly humiliating Putin, but obviously forced his hand; Romney made a fool of himself criticizing Obama during the negotiations (for one thing, it used to be considered near-treasonous to jog the President's elbow that way; for another, you look bad when you don't know what is going on behind the scenes, as when Romney made the same mistake with the blind Chinese dissident, blasting Hillary for abandoning him when Hillary was quietly getting him out of China). Neither Egypt nor Syria directly impact the price of oil, but Middle East unrest can be contagious.
Last edited by Robert Eckert; 06-20-2012 at 08:55 AM.
i still haven't figured out how the heck you make calls to go long or short with this indicator which kinds of annoys me, but the posts that i have seen so far, u have been right more times then wrong, so great job and keep it up
goes to show, even the most funny looking system that looks sooooo unreliable in the right hands, can make you $$$$$$
I agree, its funny looking system/indicator. But not difficult to figure it out. It fits to the trend lines and is easily understandable.
Long term, Germany's economy also is hurt by overvalued euro, but it has been insulated from the effects for various reasons. Exports are hit less because half of Germany's exports are within the Eurozone. Tourists do come to Germany but this is not nearly as important to the economy as in Greece, Spain, or even Italy. Foreign remittances work the other way: there are many Greeks abroad (some within Eurozone but often in the UK or US) sending money home to their families, which is worth less when the euro is high; in Germany on the other hand, Turks sending money to family in Turkey find that it goes further with high euro, which lets Germans get away with paying them lower wages. Germany is now sliding into recession, as the collapse of demand in the southern economies finally brings the consequences back home.
But it is not exactly "Germany" which is keeping the euro high: although the Lisbon Treaty requiring the ECB to focus on inflation-fighting was written with German sensibilities in mind, chairman Draghi is not German, and neither are a lot of the major players at ECB. The non-Germans as well as the Germans in the ECB have imbibed the culture of keeping the money supply tight, regardless of the circumstances. The LTRO (long-term refinancing option) program of last year was treated in much of the financial press as an equivalent to the QE (quantitative easing) of the US Fed, but it was not: it was coupled with "redeposit" programs in which the ECB induces the banks to park their money in accounts at the ECB, accounts which sit idle: they are not invested in anything, or lent out to anybody. If the simple-minded metaphor for QE is "cranking up the printing presses", the redeposit programs can be simple-mindedly considered "tossing bundles of euros into a bonfire". The SMP (secondary market program) whereby the ECB buys up some sovereign-debt bond paper (they cannot acquire it at the primary auctions, as they are not allowed to lend directly to the governments, but can buy from the holders) was recently resumed after a long hiatus, but similarly its effects were neutralized by a counterbalancing expansion of the "redeposits" to make sure that there is no money in the European economy getting lent to anybody or starting any new businesses. This is intentional, because it is their charter. Can they be persuaded to change tack? The price-index figures are expected to show negative inflation which may provide the ECB with political cover: if there is actual deflation then, since price "stability" is actually what they are told to pursue, shouldn't they know finally be expanding the money supply?
Some hint that this may be in the works came in Obama's press conference a couple hours ago, when he made a rare direct reference to the forex markets, saying it would be unhelpful for major countries to compete in trying to undervalue their currencies. Obama cannot control Bernanke, but there may be a consensus among the fiscal as well as political authorities that the Fed should refrain from any QE to bring down the dollar, and the Bank of Japan refrain from its usual USD/JPY purchases (the "charts" have been saying for a while that we are back to the point in the cycle when USD/JPY should go up again, but BoJ is unusually sidelined) in order to give the ECB room to knock the euro down, if they are finally ready to take it.
In Greece, Venizelos (of the Pasok party) explains the second day of holdup in forming a government as being about the composition of a negotiating team to fight with the Troika over re-doing the terms of the March memorandum. The argument the Greeks are making is that the memorandum was drawn up on economic assumptions that have failed (the rate of GDP contraction accelerated a couple percent-- not coincidentally, in my view, that started with the March shootup in the EUR/USD rate). Angela Merkel continues to be the face of the "Let's let everybody go broke!" policy but is becoming somewhat bypassed. In Egypt, the second day of holdup in announcing results of the Presidential race has led to a re-occupation of Tahrir Square; Hosni Mubarak is in a coma, rumored by some to be dead and by others to be fine and smuggled out of the country as part of a corrupt bargain; the military reaffirms that it will not allow a Parliament to be elected until a new Constitution is drafted (by whom?) so it may not matter much who is President, but if they try to say Shafiq won (independent estimates are Morsi 52-55%, Shafiq 42-45% with about 5% intentionally spoiled ballots) no-one will buy it. Russia ordered a ship full of helicopters bound for Syria to turn around for home, after a visibly tense session between Obama and Putin; Obama avoided publicly humiliating Putin, but obviously forced his hand; Romney made a fool of himself criticizing Obama during the negotiations (for one thing, it used to be considered near-treasonous to jog the President's elbow that way; for another, you look bad when you don't know what is going on behind the scenes, as when Romney made the same mistake with the blind Chinese dissident, blasting Hillary for abandoning him when Hillary was quietly getting him out of China). Neither Egypt nor Syria directly impact the price of oil, but Middle East unrest can be contagious.
Pure gold. Thanks Rob. For what its worth, I'm with the minority today (20%) who believe the Fed will do nothing. Greece's ND win, upcoming elections in the U.S and a better than expected new building permits print yesterday leads me to believe they don't need to conduct QE atm.
Yesterday I made a small comment about the 10AM time frame and what followed were several very informative posts with regard to market times, thanks to those that shared !!
You guys sure know how to welcome and impress a forum "Newbie"
EUR/USD has corrected to its first major fibonacci level of yesterday's rally from 1.2555 to 1.2730 - but given the lack of a strong overall trend I suspect that we might correct 50% to 61.8% of yesterday's rally before we get a bullish reversals – see chart below for the 50% and 61.8% levels.
In case we get a bullish reversal then this would most likely set off a rally to 1.2750 and 1.28 – which are major highs.
Alternatively we breakout above 1.27 - this would also be a bullish trigger which would most likely take us to 1.2750 and 1.2800 in case of a breakout above 1.2750.
In case price declines under 1.2550 then all bullish bets by traders would be closed and as a further drop to 1.25 and 1.2450 would be expected.
If you can any questions about this scenario or anything else trading related feel free to write to me here on the forum.
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EUR/USD 30 min chart
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When looking for a break of e.g. the 1.27, what are you looking for in terms of confirmation? A close above 1.27 on the 30 min chart? Some other time frame? e.g. t's attempting to break right now...
When looking for a break of e.g. the 1.27, what are you looking for in terms of confirmation? A close above 1.27 on the 30 min chart? Some other time frame? e.g. t's attempting to break right now...
Usually the 5 minute time frame or 30 min if you are a bit more long term - I have not pulled the trigger just yet however - want to see how this 30 min candle close - but it looks promising for bullish traders
Usually the 5 minute time frame or 30 min if you are a bit more long term - I have not pulled the trigger just yet however - want to see how this 30 min candle close - but it looks promising for bullish traders
If we are a bit clever we will not just buy the breakout as we now look to close bullish on this candle - rather use the 5 min and buy the dip of the candle if possible - it saves you a few pips - if this does not work then going long on a break in the 5 min is good enough
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