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

Originally Posted by qed

How can you have a bullish view on the EUR when Trichet is willing to let the economy burn? Look at this chart of the relative strength of Europes largest 350 companies to that of the S&P 500. I can't imagine Europe will draw a lot of cash flows when their stocks are falling to new lows. I think the EUR is a sale here regardless of what the Federal Reserve does today. In fact an interest rate cut would probably be bullish for the U.S. dollar IMO.

We are traders.Convince me on the chart that I have to sale Euro and I will do it immediately.We have entry level(buy)-stop level, target price(sell)-stop level.If something has to come down it goes down-up down-up with a 5-3 sequence.Get used to it or otherwise the only level that will be hit is your stop loss.

The probability of a rate cut by the Federal Reserve increased dramatically yesterday and today, yet the EURUSD is falling. I don't understand this. Is is simply the unwinding of the EURJPY carry trade?

Originally Posted by sgoran

Hi beautiful people!

Guess you are addressing me

Jamie is a very smart analyst. However, remember that Forex analysis is like the story about an Elephant and Five Blindmen. Each will hold on to their own method and claim it is superior. You are on your own to try different approaches and see what fits your style, your investment goals, your risk tolerance etc.

Jamie has been able to successfully pick several breakout scenarios in the past. On the 'trending' side, it is my impression that his technical conclusions have shown a three sigma variation from the mean :P That is the nature of technical analysis. You look at history and attempt to extrapolate it to future. Problem is, everyone does that and the chart is no more "stochastic". Instead it is a Markov chain of order 30 (so many days the trend continues). So, technical analysis fails frequently. That has nothing to do with Jamie's ability to investigate. He does an excellent job with whatever is given to him. On his prediction about EUR going back to 1.6, I say the odds are higher than 50%. Trichet has clearly indicated he is not going to cut rates for another two years. The recent selloff came from commodity price crash that strengthened USD. That selloff has stabilized. Now we are back to the regularly scheduled programme of USD taking a beating from other majors.

Originally Posted by FIDELIO

We are traders.Convince me on the chart that I have to sale Euro and I will do it immediately.We have entry level(buy)-stop level, target price(sell)-stop level.If something has to come down it goes down-up down-up with a 5-3 sequence.Get used to it or otherwise the only level that will be hit is your stop loss.

I'm a trader too. But I look at the funadmentals as well as the charts. The way I see it the EUR and GBP should be rallying on the prospect of a federal reserve cut. They are not rallying, so I had to cut my losses in my EURUSD position and reverse.

London is the financial capital of the world. AIG insures derivitives in London. This concerns me.

"If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has. "

John Maynard Keynes

U.S. banks are in the eye of the storm, but my concern is European banks if AIG is unable to pay their obligations.

Hi,

I know the usual logic about interest changes etc.. but somehow this rate decission seems a little more important and unstable.

IF they decrease interest rates, the dolar should have a sellof, HOWEVER this will increase the volatility of everything and the people might run to financial paper that is not cash denominated in Dollars, eg: 10 year note etc..
So this would just create a substituion effect from cash but still make a demand for dollars in the short run until the central banks change their security to gold again, away from the fniancial papers and cash.

IF they increase interest rates, the dollar should rally, but then all the companies with financial trouble, including the financial sectors will be looking for a fail, so all the confidence in USA would fail.

IF the interest rate stays the same, it will imply a bullish outlook for the dollar, as everyone who was selling the dolar would change position, this would cause the dollar to rally and will push the oil price down, and like a snow ball effect for the dollar.


So the only decision that is the easiest to trade would be if the interest rate remains at 2.00%.

Any other views?

Thanks
GGunit

Originally Posted by LuSaxy

Hi,

I know the usual logic about interest changes etc.. but somehow this rate decission seems a little more important and unstable.

IF they decrease interest rates, the dolar should have a sellof, HOWEVER this will increase the volatility of everything and the people might run to financial paper that is not cash denominated in Dollars, eg: 10 year note etc..
So this would just create a substituion effect from cash but still make a demand for dollars in the short run until the central banks change their security to gold again, away from the fniancial papers and cash.

IF they increase interest rates, the dollar should rally, but then all the companies with financial trouble, including the financial sectors will be looking for a fail, so all the confidence in USA would fail.

IF the interest rate stays the same, it will imply a bullish outlook for the dollar, as everyone who was selling the dolar would change position, this would cause the dollar to rally and will push the oil price down, and like a snow ball effect for the dollar.


So the only decision that is the easiest to trade would be if the interest rate remains at 2.00%.

Any other views?

Thanks
GGunit

I will not disagree with what you say will happen in each case. Even if you're right, the problem is not what will happen, but, which case will come out of the meeting!!!!!!

Originally Posted by rickos69

I will not disagree with what you say will happen in each case. Even if you're right, the problem is not what will happen, but, which case will come out of the meeting!!!!!!

It`s always difficult.. however i still like the Buying Euros outlook for the decrease in interest. but i am going to wait for about 30 minutes just incase momentum traders come in-and to iliminate the noise from indecision. if no momentum traders i can see 1.49 by friday.

Thinking about putting an entry order at 100pips above the last traded price before decision to ensure the movement to the top(if interest rates drop)-less profits, but the pair is just dodgy, i looked at volume levels yesterday, and compared to the high of the past 30 days, there was a volume of less than 1%. because of that the movements of today don`t really mean that much to me because new entries drive the price, but these volumes get bullied easily by the momentum movers when they come in.

Thanks
GGunit

Originally Posted by qed

I'm a trader too. But I look at the funadmentals as well as the charts. The way I see it the EUR and GBP should be rallying on the prospect of a federal reserve cut. They are not rallying, so I had to cut my losses in my EURUSD position and reverse.

London is the financial capital of the world. AIG insures derivitives in London. This concerns me.

"If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has. "

John Maynard Keynes

U.S. banks are in the eye of the storm, but my concern is European banks if AIG is unable to pay their obligations.

Charts are depicting what fundamentals are not able to speak today. Always pay attention to fundamentals but this does not mean that they always synchronise. If markets were just fundamentals there wouldnt be any price fluctuations because the interpretation of statistical data is just ...objective.
Have you got any Eur/Usd charts to show us?

Originally Posted by LuSaxy

It`s always difficult.. however i still like the Buying Euros outlook for the decrease in interest. but i am going to wait for about 30 minutes just incase momentum traders come in-and to iliminate the noise from indecision. if no momentum traders i can see 1.49 by friday.

Thinking about putting an entry order at 100pips above the last traded price before decision to ensure the movement to the top(if interest rates drop)-less profits, but the pair is just dodgy, i looked at volume levels yesterday, and compared to the high of the past 30 days, there was a volume of less than 1%. because of that the movements of today don`t really mean that much to me because new entries drive the price, but these volumes get bullied easily by the momentum movers when they come in.

Thanks
GGunit

DO NOT IGNORE INTERVENTION!!!!
How about this scenario? They let you buy at 100p above last high, and then the bottom drops out.

I'm not saying this WILL happen. But, it CAN!!!!

Just BE CAREFUL!!!!!

Originally Posted by rickos69

DO NOT IGNORE INTERVENTION!!!!
How about this scenario? They let you buy at 100p above last high, and then the bottom drops out.

I'm not saying this WILL happen. But, it CAN!!!!

Just BE CAREFUL!!!!!

yeah i know, but not only the intervention from the US, how about intervention from China or japan, it is good for them if they help the dolar.

however if they try pull the bollom out and they find out that the pair can walk on air, then they have a big big problem. especially if it was the US trying to pull the bottom out. and that would be really interesting.


Thanks
GGunit

Originally Posted by DollarBull

Guess you are addressing me

Jamie is a very smart analyst. However, remember that Forex analysis is like the story about an Elephant and Five Blindmen. Each will hold on to their own method and claim it is superior. You are on your own to try different approaches and see what fits your style, your investment goals, your risk tolerance etc.

Jamie has been able to successfully pick several breakout scenarios in the past. On the 'trending' side, it is my impression that his technical conclusions have shown a three sigma variation from the mean :P That is the nature of technical analysis. You look at history and attempt to extrapolate it to future. Problem is, everyone does that and the chart is no more "stochastic". Instead it is a Markov chain of order 30 (so many days the trend continues). So, technical analysis fails frequently. That has nothing to do with Jamie's ability to investigate. He does an excellent job with whatever is given to him. On his prediction about EUR going back to 1.6, I say the odds are higher than 50%. Trichet has clearly indicated he is not going to cut rates for another two years. The recent selloff came from commodity price crash that strengthened USD. That selloff has stabilized. Now we are back to the regularly scheduled programme of USD taking a beating from other majors.

Irrespective of Trichet's hawkish rhetoric, fixed income markets are pricing in a minimum of 50 basis points in cuts from the ECB in the next 12 months. I think it is a dangerous assumption to take a central banker word literally, especially in this scenario where commodity prices have continued to slide since the September rate meeting.

Hi Folks

Have you seen the TIC Flows...they are far from "interesting"

I am in with a long @4133 SL 4075
If 4075 is breached my count was wrong. I see this as ABC correction with huge potential to the upside. Great risk/reward.

Originally Posted by Ilovepippin

I am in with a long @4133 SL 4075
If 4075 is breached my count was wrong. I see this as ABC correction with huge potential to the upside. Great risk/reward.

I'm with ya at 4124. But, stop is in front of me (4130) not behind. Just to be on the safe side.

Originally Posted by rickos69

I'm with ya at 4124. But, stop is in front of me (4130) not behind. Just to be on the safe side.

Are you Short?.. then SL is not right!! correct me if im wrong