Andy K.

Multiple accounts. Long USD in 1 and 3, but trading in and out on the wave in 2.

ch22, I didn't mention anything about the Euro in that post, I was simply discussing what the ECB may do regarding policy action within the next few months.

John,

I agree that the trend can be your friend and indeed much money is to be made trading- everyone does it, thats FX.

However don't get caught off guard when the tide changes- and change it will. You see, the ECB has a major storm on its way, one that I have been touting for, well, let's just say quite some time, long before my birth on this board- slowing growth, rising inflationary pressures, increased unemployment (forget the German unemployment data today which decreased from 8.8 to 8.7 as mostly these are 400 EURO/month jobs) You see, the EU is not truely a free market society and they need continued intervention from the gov which in turn leads to only more problems.

Did you know the tax rate in Germany is on plan to increase from 19% to 21% starting Jan 2009? When oil prices go up, in America people cut back and in turn inflation cools itself to a large degree. In the EU, something else happens. When oil prices go up, people cut back but are forced to spend more because the threshold of the oil premium is maxed out. There is no room for the price to adjust. The government runs low on cash (their's be a consumer spendin' based economy) and is forced to raise taxes which in turn causes people to spend less... and the cycle continues. In any event, as I have said many times before the fundamentals of the EU economic policy is flawed.

Just something to consider when you're set to go long indefinitely and cheer the euro on. The higher it goes the harder it falls.

hi..

Retired.....well not planning on going long indefinately...trade by trade....and using a stop loss so if it turns....so be it..

over valued since it was 1.15...in your opinion....but look where the price is now......just goes to show...your opinion and mine and everyone else's on this forum means nothing in the scheme of things.....the next best thing is the charts..

anyway....profitable trading to you..

__________________
regards

John M

Live long and prosper.
Any information in this post is for discussion purposes only.

So which way to we see the the Euro heading today? News for USD is bad....The little news that we saw for Euro was good.....Any thoughts?

Please enlighten me on the bad news first. Everything was in line with expectations and then some, even the GDP. Seems to me the EU has caught a cold in comparison.

Well unemployment was higher, new home sales I would say was disappointing based on the revision, Oil is up, Sears earnings came out lower, but your right GDP was in line with expectations. Im just trying to decide on direction for the day. I trade short, medium, and long. I follow technicals as well as fundamentals. Overall today seems like we will bounce in the 4720-4850 range.

New home sales revisions were dreadful. Unemployment claims spiked higher, and the story of the labor market coming undone is all that it takes now to stroke the fires of recession in the US.

You don't seem to get it. I think you might have come back from your "hiatus" just a bit early, retired. Sentiment is so strongly against the USD that no matter what happens, anything not a greenback is preferred. Anything. Regardless of what comparisons you want to draw on economies in a side-by-side analysis. Doesn't matter. Sentiment will eventually change, and we're nearer to the end than the start, but it's not going to move until it wants to - game over.

The problem is the Fed. The Fed continues to signal more free money, lower rates. Lower rates and free money is what got us where we are today, and that's what's keeping the party going. It's going to keep the party going until the Fed arrives to the understanding that they cannot cut anymore. Until then, there is no reason not to continue buying everything but the USD and making money. If you want to be disgruntled at it, hate the Fed. I know I do.

Otherwise, join in and get the free money while it lasts.

Well said!

From today's SSI weekly report:



EURUSD – FXCM positioning data shows that 53% of traders remain short the EURUSD, but long positions have surged 37.2 percent since last week’s report. The sudden shift in crowd sentiment suggests that the EURUSD may see further correction before resuming its uptrend, and a flip to net-long positioning would give clear warning of potential EURUSD drops. A 13.1 percent drop in short positions since last week confirms that the crowd is progressively becoming bullish the EURUSD—a potential warning as to the short-term direction of the currency pair.

You seem to be very pessimistic on the dollar. I can't agree with your analysis that the dollar will fall in all situations outside a leveling at the Fed. I think market expectations are pricing in steady declines in US rates, and prices through interest rate-related assets are already positioning for that downward bias. On the other hand, you have a number of economies whose yield curves are still on a positive slope (Euro-Zone, UK, Canada, etc.). Therefore, if the Fed stays in line with expectations, it could actually rally through its own gradual decline in yield if it is paired up with currency whose central bank delivers a surprise cut (and opens the doors to further declines).

The best situation for steady rate cuts and a rallying dollar though would be a global turn towards lower rates. If all the major economies start cutting rates as cross boarders' growth and inflation trades cool, yield advantage would mean much less to forex traders (especially the big guys who use absolute carry for income between big spec trades) and instead you'll start seeing a market that is looking for bargains. That's how I see it anyways...

That being said, I'm still bullish EURUSD until it breaks below 1.46. Such a move would be a medium-term turn for me.

I'm not as negative as you think. Let's not forget I shorted EUR/USD a week ago.

The point is that, to other central banks, inflation is a big concern. To ours, it isn't. What is a concern to the Fed, however, is giving the market more cheap money. I am negative when it comes to our central bank, which in turn translates to a bleak hope for the dollar.

Meanwhile we're paying for near $100 oil, the dollar is near or at record lows against major currencies and the stock market is being propped up by nothing more than the promise of a rate cut.

I'm annoyed because markets need to correct, and as usual we're trying to prop them up to the disadvantage of many, only to service a few.

I agree with you here. Forecasts for growth aren't even that low and real (as I measure it in my bills) inflation is climbing. I think the Fed is catering to the markets. And, while they are acting more for credit markets (an integral part of the domestic and global financial markets) rather than for any other speculative markets, the other central banks are keeping their overnight lending rates steady yet are still doing their part by injecting the system with liquidity until the mess works itself out. Of course, they could be doing this at their own hazard and may need to turn and cut rates as well, but that doesn't seem to be the formula now.

And, for the stock investors out there, we can't always have stocks rise. I am completely shocked how few people will actually short a stock or buy a put or sell calls even when they know what they in is way overvalued. Would you pay twice the MRSP for a car? Then why pay twice the value for a share with ridiculous EPS and earnings forecasts? And, shame on the portfolio managers, professionals who are supposed to know better, that only buy. I trade stocks and futures (and options on both), and I'm just waiting for a big shorting oppurtunity.

That's just the "Bigger Fool" theory.

On another note, what do you think of this:

Uhm...excuse me for asking, but does this Mideast Council meeting this weekend not represent a left jab/right uppercut for the downtrodden dollar? Is the market already pricing in a currency diversification or is there a wait and see attitude? It seems to me that would trigger another bullish run against the USD, thereby delaying this supposed correction? (lest the correction precedes the meeting this weekend).

Relative newbie here, any thoughts on the matter would be appreciated...David?