I didnt expect USD to get that strong on friday. All the 1hour candles were red. Not a single green candle and Dow really smacked Euro as well.
For Sunday/Monday i think the japanese markets will sell out eur/usd bcz of the NFD data and we could possibly see it come down to 1.32.
I am stuck at long EUR/USD at 135.74. What you guys think? Should i get out now?
This is just a suggestion Khanay, since you're already 150 pips down, set your stoploss to 1.3400. The 50% retracement from Friday's move is around 1.3580 and if you include the 50% retracement from Thursday, it will sit around 1.36. If you have the option then set a trailing stop. If not then revise you stoploss if it gets above 38% retracement at 1.3540 to around 1.3520. Watch like a hawk somewhere around 20 points below the 50% retracement at 1.3580 as it could turn there.
This is really to discipline you and try and minimise your loss if it retraces back toward the 50% mark, in the event that it doesn't get all the way to your opening price of 1.3574.
Upside, you might get lucky and it goes beyond 1.3574. Downside, you lose an additional 30 pips to your 150 pip loss, and somewhere in the middle you reduce your loss to say 40 pips.
Shame you hadn't set a stoploss at say 1.3525 (just below previous peak of 1.3535 on 6th). Hope it turns out okay for you on Monday whatever you decide. Remember, after the last NFP report on December 5th, the $ weakened against the Euro by 20 cents! Best of luck.
The article is of interest but what so many people seem to miss is that half of U.S. debt is held by foreigners. These foreigners are trading partners of the U.S. To immediately pull out of the U.S. dollar would not only devalue their bond investments but would cause world wide disruptions in trade that would be of benefit to no businesses. Ask any businessman if anywhere in the world if they enjoy extremely volatile currencies. A massive pullout of U.S. savings bonds is just no going to happen. The U.S. is and will likely remain the largest economy in the world, with the most powerful military in the world. And that carries clout in the currency markets. Just go to this link, click on the Special Global Investing report on the left. Expand the map of the world stock exchanges. You will see that the U.S. remains dominant.
I disagree that oil is still crashing though. Many marginal oil fields are budgeted with a break-even price around $30 - $50 these days. In the MiddleEast these break-even costs tend to be lower and with many of the gulf nations needing a price of over $50/bbl to avoid budget deficits, oil is cheap at this price. The days of "easy oil" are over, coupled with the fact that last year OPEC was pumping full-tilt and couldn't satisfy the market, as well as a weakening $, and some speculation, which ended in $147/bbl oil.
I fully expect the oil price to recover towards $70-$80/bbl which is a price everyone (i.e. oil producers) would be happy about.
It remains to be seen how much non-OPEC production gets shut-in, due to the lower oil price, and projects put on hold. As for European companies losing out on the MiddleEast, I would also refer to Dow Chemical's $10 bln+ project in Kuwait which was shelved for now.
Perhaps the Eurozone's recovery may or may not come later than the US, but the Eurozone does not have the huge trade deficit that the US has (I am not including the UK here for obvious reasons).
It is with that in mind that wherever the Euro bottoms out at against the $ in the short-term, the $ in my view, will still have to devalue in the longer-term. I personally believe the $1.2323 low we saw back in October is the low (I may be wrong, but it will be close) and is the result of USD repatriation of overseas income/assets. Look how quickly the emerging markets collapsed. Once risk-appetite picks up again, and as many economists are looking for a recovery somewhere around Q3, we'll see the $ devalue again.
If anyone has read George Soros' "The Alchemy of Finance", I refer to his equation #6 on the chapter on Reagan's Imperial Circle. However, Volcker was chairman of the fed back then, and low and behold is now chairman of the newly formed Economic Recovery Advisory Board under President-elect Barack Obama. So it remains to be seen how much the $ will fall later in the year.
Coming back to the present, and immediate future, I expect we'll see a retracement of Friday's move back towards the 50% retracement point (1.3580s-1.36), before heading lower toward's 1.33 again, and below, once the expected rate-cut is announced.
As you probably know commodities can go much higher or much lower than the cost of production, especially when financing dries up. For instance grain intermediaries sold short grains in the futures market. Then when the credit crisis hit their normal credit lines were pulled. Therefore they were forced to cover their futures contract driving grains up beyond their intrinsic value. This busted many grain intermediaries. The point is that very strange things happen at the tops and bottoms of commodities markets. Here are finding costs worldwide in 2007. Just because a country has budgeted for $60 bbl oil doesn't mean that they will get it. There are many countries around the world that are in deep trouble and will pump every barrel of oil possible regardless of OPEC quotas.
I like the way oil stocks are acting with falling demand so I agree by late this year oil could be back up to $90.
The Erozone has a debt to GDP ratio of 66%. The U.S. 70%. This is a small difference whend considering our cost of raising debt is much lower. It is really not an issue in my view. As far as the trade balance goes that will shrink as the U.S. consumer has seized up. I think the currency markets are probably forward looking on this but I could be wrong.
I read that George Soros book but I simply had no clue as to what the heck he was talking about. I had never read anything about the currency markets though so that may be one reason why.
A lot of the recent cost estimates are based off of when the price of commodities where high and there were shortages of labor. This situation has changed for the better.
This is just a suggestion Khanay, since you're already 150 pips down, set your stoploss to 1.3400. The 50% retracement from Friday's move is around 1.3580 and if you include the 50% retracement from Thursday, it will sit around 1.36. If you have the option then set a trailing stop. If not then revise you stoploss if it gets above 38% retracement at 1.3540 to around 1.3520. Watch like a hawk somewhere around 20 points below the 50% retracement at 1.3580 as it could turn there.
This is really to discipline you and try and minimise your loss if it retraces back toward the 50% mark, in the event that it doesn't get all the way to your opening price of 1.3574.
Upside, you might get lucky and it goes beyond 1.3574. Downside, you lose an additional 30 pips to your 150 pip loss, and somewhere in the middle you reduce your loss to say 40 pips.
Shame you hadn't set a stoploss at say 1.3525 (just below previous peak of 1.3535 on 6th). Hope it turns out okay for you on Monday whatever you decide. Remember, after the last NFP report on December 5th, the $ weakened against the Euro by 20 cents! Best of luck.
Thanks meonia. I'm in the same boat with a net long position of 2 lots at 1.3535. I'll take your advice and put a stop in there below the Friday low and look for a retracement back above 1.3500. I don't know if it will happen, but Friday's rout was pretty one-sided and it seems the EURUSD may be a little oversold short-term. I hope I can at least break even since I don't have much equity to play with in my little micro account of $45 -- I'm just learning Fx (the hard way, apparently). :-)
gold standard : impossible amymore
armageddon : we are experiencing a such now
usd weakness at extreme : gods of the market provide solution
if i tell you the stock will still lose 30 % you will still laugh
stocks are not currency : currencies are the least volatile
needless to say i am very disappointed from the NFP, was expecting much worse, my incredulity hunted me back on my portfolio.
i still can not interpret the eur/usd reaction today, i thought that kind of result was priced in already
well, i was wrong
open positions so far
eur/usd 1.3343 long (massive position)
eur/chf 1.49719 long (average position)
eur/gbp 0.89153 long (small test position)
usd/jpy 91.247 short (massive position)
closed the eur/jpy position with a loss
eur/usd added long 13492 (small test position)
eur/usd added long 13429 (large position)
i am leaving all position opened for next weak
gods of the market bless us
even this time please
please stop trolling tell us when you will open positions we can all speak of the past. I predicted dollar to strengthen at 1:60 in july. You are a man of the past not the future.
The article is of interest but what so many people seem to miss is that half of U.S. debt is held by foreigners. These foreigners are trading partners of the U.S. To immediately pull out of the U.S. dollar would not only devalue their bond investments but would cause world wide disruptions in trade that would be of benefit to no businesses. Ask any businessman if anywhere in the world if they enjoy extremely volatile currencies. A massive pullout of U.S. savings bonds is just no going to happen. The U.S. is and will likely remain the largest economy in the world, with the most powerful military in the world. And that carries clout in the currency markets. Just go to this link, click on the Special Global Investing report on the left. Expand the map of the world stock exchanges. You will see that the U.S. remains dominant.
I was expecting a corrective climb for EUR, EURJPY etc since they fell drastically on Friday. However, the imminent rate cut by ECB (rate to 2.0) may kill EUR further and also aggravate the risk aversion. Both EURUSD and USDJPY may fall further, thereby sending EURJPY to 115 or even much lower. There may not be any noticeable recovery until then.
I was expecting a corrective climb for EUR, EURJPY etc since they fell drastically on Friday. However, the imminent rate cut by ECB (rate to 2.0) may kill EUR further and also aggravate the risk aversion. Both EURUSD and USDJPY may fall further, thereby sending EURJPY to 115 or even much lower. There may not be any noticeable recovery until then.
Yeah, I agree and looking at the current EMAs looks about ready for a breakout to the downside from 1.3425. If it does, then let's see if it has the legs to push through 1.3380.
I just want to comment on this
Most of the drastic moves in any asset class don't happen intentionally or are planed so this canbe with the US t bonds
If panic strikes anything can happen
Yes it would be a major blunder but when everything the one has is in a line he doesn't think just reacts
If the US economy doesn't show some signs of recovery and there will be no growth in china, they may start pulling out
I agree that at some point it will be in China's interest to sell U.S. bonds. A dramatic move seems unlikely because all of the central bankers are on red alert and this is a global crisis. There are Federal Reserve employees stationed at the offices of every major bank which reduces the risk of a major event.
If you can catch the turn in U.S. bonds you will likely get very rich. At the moment I am waiting and watching the U.S. bond market looking for a short entry point. I think there is a strong probability of a "growth scare" this spring which could cause a massive selloff in the U.S. bond market. Though I do not like Obama's policies he is a powerful speaker and in my view could restore confidence in the markets. This could cause a nice bounce in stocks and riskier asset classes. Also the uncertainty over the auto stocks could be removed and cause more car buying.
The political landscape seems very much like 1933 when Roosevelt was elected. He was wildly popular and the stock market rallied 100% by year end before rolling over. At the time the U.S. was on the gold standard. To get out of the depression Roosevelts advisers decided to raise the price of gold devaluing the U.S. dollar as a means to inflate commodity prices since falling commodity prices were associated with depressions. The plan worked. Commodities and the stock market went up for four years.
That is one of the templates I am looking at. Of course that was then and today is now, so it may not play out the same way. I think the fed will win this battle against deflation and stability will return to the markets. The U.S. and Europe will be in the dead zone for at least five years with low growth. Most opportunities will be in the emerging markets.
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Originally Posted by khanay 
