where are your dual BB settings posted?

We published our Third Quarter FX market outlooks > you can find them on DailyFX.com or Here

Our Technical Analyst Jamie Saettele created this great chart for us.

This chart shows the correlation between US consumer confidence and the dollar index. We didn't use the EUR/USD because it doesn't go as far back but the same correlation can be found in USD/CHF. The chart indicates that Confidence tends to be a good leading indicator of the directionality of USD/CHF. Obviously this is a long term chart that dates back to the 70s which means that this correlation is most valid on a long term basis.

What does this tell us now? We could see a bounce in the dollar, but if confidence finds a top here and heads back towards 80, we could see fresh lows in the Dollar Index or in other words, 1.40 in the EUR/USD

Attached Images

 

from the commentary, one can infer a bottom in dollar. But is it true ?
Using a multi-decade chart to trade one or two days, or even upto 2 weeks is like trying to cross Grand Canyon fixated on the north side.

Surely, brokers are trying to shake off the long Euros, or induce short Euro positions in a Euro bull position.

you would hear a lot of such Dollar strong support at 80.30, decade long support, near term bottom, mumbo, jumbo....

Brokers have not much to make if the market is one-sided.

As for inter-market, expect a pull-back in DJ, S&P, as everybody is expecting it. Then a strong rally next week. Buy on dips for DJ, S&P, Euro, GBP, etc.

Have you heard of the story of China, people stuffing paper into dumplings, b'cos pork is now so expensive.

No doubt about it, China is facing runaway inflation. The China people are suffering from inflation, pollution, rampant floods, food scare, etc. A nation on the brink of disaster.

Food for thought.
I have been working on asisgnment with a company bought by private equity fund in the high tech arena. There is a lack of loyalty, or dedication of employees towards the company bought by private equities. B'cos employees perceive their job as unstable or shortlived. Hence you find a lot of executives trying to make monies out of the company. Companies bought by private equities fund are not necessary as efficient as they used to be. As time past, we may see the deterioration in performance of such companies, or the shortcomings exposed. This would lead to the next financial debacle after Credit Derivatives.

Whatever it is, these are Dollar negative.

IF you hear the media, they are trying to stage a low earnings expectation for 3rd Qtr. And then in the next announcement, everybody beats forecast. Just like the fake low expectation for the 1st Qtr this yr.

It seems that you are the one living in a fantasy. Are you trying to correlate the economic trend with the so called paper stuffing issue? if so, please tell people the whole story. I'm living in China, if you are a truly news-lover you must have noticed that the paper stuffing news are faked, then continue with the story.....

oh, by the way, I'm not living in a nation on the brink of disaster.

the Chinese TV reported that the China authority arrested the Chinese news reporter for reporting the so called "fake news". But that is a conspiracy theory, as the Chinese government no longer can take any food scare.
When CNN, and world media reported this, they downplayed the faking element. It is not the facts that count, it is the perception. (if she fakes it, and that makes you feel good, it is good)

Just to add fire, 90 tonnes of dead rodents were collected during the flood in SzeChuan few days ago, and now Chinese authorities are in panic trying to stop people selling dead rodents as restaurant food.

On Friday, Chinese government hiked rate to 3.3%, and lowered withholding taxes on bank deposit interest. The idea is to withdraw liquidity in the market. Inflation, as we understood it as too much monies chasing after too few goods, is now rampant in the market. However noting that China is not the only one having runaway inflation. From a Jone Lang LaSalle report, Singapore office space prices rise by 800 USD/psf, while Tokyo was 662 USD, HK 208, and Shanghai 206. (Singapore probably got a big help from Jim Rogers who keep saying that he is selling his NY apartment to migrate to Singapore).

Vivi, you can deny that the cardboard paper dumpling is fake, however you cannot deny that the price of pork is at historic high in China, along with other food stuff.

Chinese producers have a limit to raising prices, as China people are not inclined to accept price increases willingly. For example, instead of eating pork, they may choose to eat dead rodent meat. And when dead rodent meat is banned, one may expect mass dissent.

You can be assured that that is what is keeping Mr Wen awake at night. The rising inflation, parabolic stock market, and mass liquidity. There is so much he can do, the entire monetary bureacracy is infested with power bases of HK, US money mongers. Take for example, the recent DowJones insider trader involves the HK Chairman of Bank of East Asia who was recently knighted by the Chinese government.

Foreign investors on the pretext of investments, brings in foreign monies, swapping for artificial profits, and investing in the stock market. Sooner or later such monies would be trapped in China, without any avenue of exiting.

Would China embrace full heartedly Capitalism to risk the collapse of Communism ? or would China punish Capitalism to restore the almighty Communism ?

Then the foreign companies would suddenly morph into distress.
Caterpillar is an example, it is a company with a big chunk of revenue from overseas. Is the world turning over ?

However having said this, it does not mean that the Equity market would turn upside down tomorrow. As there is massive liquidity out there, not to mention the pending 200 Billion USD from China (divestment from US treasuries in search of higher yields). It would be like the Hoover Dam breaking, and lashing out the stock market with monies for the next rally. The market is irrational to say the least.

If you ain't having fun, it is your fault. Vivi Hooray !!!

Vivi, I just cannot stop writing. Just to lighten up.
There was a news, a Chinese labourer after slogging many yrs in the city earned 10,000 Yuan (about 1500 USD) took a train back to his home town faraway. He went to the toilet on the train, and the monies dropped into the toilet bowl and out it went onto the tracks. Once reached the next stop, he dropped and reported to the local police. The local police decided to comb the tracks in the night for hours, and finally recoverd about 6000 Yuan.

What is the rationale ?
The corrupt police hid away the other 4000 Yuan ?
The toilet on the train is dangerous, you may fall onto the track going to toilets ?

Well, it is:
US and the world has been extracting wealth from China for the past few years and sustaining high consumption, moderate inflation, staving off pollution. In exchange, Chinese get meagre returns, pollution. USD has been propped up by the Chinese all these while. If China catch a flu, US and the world is going to sneeze.

Sooner or later USD is going to snap. Looking forward to USD to test 79, and see how Fed uses its newly empowered authority to intervene in the currency market (to withdraw liquidity to say the least), alongside with IMF probably. the Fed and IMF have been preparing for this battle for the past one yr.

Probably Euro would be at 1.4000 and GBP at 2.10, Gold touching 730, S&P 1600, DJ 14500. This would probably happen in August.

Me ain't dreaming, I have been right all these 2 weeks, especially with Euro above 1.3800 and DJ breaking 14,000.

Wow! I really appreciate your time and efforts on your personal research in the economy and social phenomenon of China, I believe the Chinese government feels even more grateful for your concern than I do. I totally agree with your points on inflation, mass liquidity, and your warnings on money mongers from US and HK. Capitalism or Communism? That’s a topic beyond personal capabilities of you and me.
What I’m trying to say is every country in the world is “spinning” in the economic cycle, fortunately, China is in the economic upturn, however others are suffering from the slow growth or even the downturns. Do you think inflation is avoidable in an economic surging? Whatever happens let it be! If you cannot change the world, then be prepared for what’s going to happen. So I suggest you’d better stop worrying and panicking, be prepared for any changes and back to trading.
Nice talking to you!

Just picked this up at FT: Sarkozy seeks tougher line on China

Rock the boat / Don't rock the boat baby ...

One could look at the plot as a possible AB=CD (from 2000) which would give AB=CD786 as circa 1.5922, (and a full 100% = 1.7073).

I dont calculate Gann out that far but for short term I am looking at possible resistance 3875, with 4150 feasible in the medium term as mentioned in an earlier post. (3916 a hurdle in-between).

Meaningful Gann support @ 3796

rgds - arco

arco, would you mind posting a chart for EURUSD and GBPUSD and each thread? I noticed that .0556 Cable and .3796 EURUSD both gave support at the levels you mentioned. I would be keen to see how you interpret Gann on your chart. I have a chart package called MetaTrader that can draw Gann studies and I have a book by Pring that gives a brief explanation to Gann angles so it wouldn't be totally lost on me!

Hi Black.day

I calculate the Gann points daily (like pivot points), so they are not automatically visable on a chart.

I dont remember the Gann on MT, so not sure how it is calculated. Have you checked to see if the Gann lines correspond with my figs? (I had MT loaded at one time, but I only use Metastock EOD now for my calcs).

rgds - arco

Hi Guys,

I'm happy you were able to start a discussion but I would like to remind you that this thread is specifically dedicated to the EUR/USD only. If you would like to start a discussion about another topic you can create your own thread in the Guest Traders sections:
http://www.learncurrencytrading.com/...play.php?f=157

Thank you for understanding.
DailyFX Forum

Sarkozy is certainly looking to rock the boat a bit. He's on a populist bent trying to talk down the Euro and challenging the independence on the ECB. It sounds like a bunch of baseless saber-rattling that will do little to move markets, however, and I wouldn't worry about it too much. We all know that Western politicians are trying to force further appreciation of the CNY. Is it going to get anywhere?

A couple of years back the Euro came under scrutiny from a few of it's member states with France again at the forefront of this and questions were being asked as to whether a single currency will or will not be viable for all countries within the eurozone. I'm begining to wonder whether these questions may be about to surface once again especially considering the Euro's recent bullish run. Should it happen I would expect the Euro to drop quite considerably. If it does happen then one would expect President Sarkozy to be at the front yelling loudest. His only allies right now are the Italians, namely Prodi, but should either rock the boat much harder others may join the sway and perhaps even lead to threats being made regarding Euro participation?

I get the feeling President Sarkozy see's himself as something of a cat eager to get amongst the pigeons.

President Sarkozy is under a particular amount pressure to get the French economy back on track. The easy way (as he sees it) - a depreciation of the euro. The hard way (and most sustainable method) - broad reforms. France and Italy have not been nearly as aggressive as countries like Germany, which has made enough adjustments to fiscal and economic policy so that they can weather a stronger euro.

This is true. The european region wants stronger growth and yet they don't want the interest rates that come along with it - pretty counterintuitive. Taking their aggregate growth rate, they can 'afford' to have interest rates on par with the US or UK. The problems are stemming from the socialist policies in France that don't jive with interest-rate targeting monetary policy that the ECB uses. There will always be one country or another that will have problems with interest rates whether they are high or low just because they are applying one rate to more than a dozen independent countries. Interestingly enough, a few of the lesser problems would have been corrected with the purposed EU Constitution vote which France itself vetoed.

And specifically for the euro and the threats of breaking it up; I think the market knows that would not likely happen. In additional to all the reasons you guys posted above, it would also be incredibly expensive and take many years to rotate marks, lira and francs back into the mix.