Thread: GBP and JPY Pairs H1 2013

Hi,

Below you will find an article which I hope will help you answer the question.

It may be a holiday week in the U.S., but with 2 major central banks expected to ease monetary policy on Thursday and the U.S. non-farm payrolls report scheduled for Friday, we should see a pickup in volatility over the next 48 hours. Having left interest rates unchanged at 1% since the beginning of the year, the European Central Bank is now expected to cut interest rates by 25bp to 0.75%. Although the ECB has not dropped hints about their inclination to ease, 82% of the economists surveyed by Bloomberg expect the central bank to cut interest rates. Considering that the news agency surveyed 62 analysts, this is not a small amount. The main reason why the ECB is expected to ease is growth. While the financial markets have stabilized and Spanish and Italian bond yields declined, economic data has taken a turn for the worse. The commitment to austerity in Europe poses a major threat to growth in the second half of the year and if European policymakers want to avoid a deeper recession, monetary stimulus is needed to support the economy.

While we agree that the ECB needs to ease, President Draghi has shown very little indication of his plans to do so and has preferred to keep pressure on European leaders by holding off further measures. The main question for Draghi tomorrow is whether EU Leaders deserve to be rewarded for the banking union or punished for not making progress on a fiscal union. When the ECB last met, Draghi left monetary policy unchanged and said there is only so much a central bank can do. For the past few months, he has held back monetary stimulus to pressure European Leaders into action and based on his comments following the EU Summit, he is pleased with their results. Draghi said EU Leaders made good decisions, delivered tangible results and took a courageous leap of political imagination. Preparing the market for an interest rate cut before it happens is the traditional mode of operation for the ECB under Trichet. However Draghi has not presided over enough changes for us to see whether he follows the same MO and his first rate cut as ECB President came as a complete surprise.

Why the ECB Rate Decision Could be a Win-Win for EUR

Given expectations from economists, the greater risk is no action from the central bank but regardless of the outcome this could be one of those unique situations where the EUR/USD could rally if the ECB cuts interest rates OR leaves them unchanged. Normally an interest rate cut is negative for a country's currency but Europe desperately needs stimulus from their central banks and a rate cut from the ECB could actually induce a rally in risk and in turn the EUR/USD. In other words, the ECB rate decision could be a win-win for the euro. If the ECB leaves rates unchanged, the EUR/USD could be squeezed higher. If they cut interest rates by 25bp, the EUR/USD will probably sell-off initially but recovery in the days that follow as investors look at the addition of stimulus as an antidote for weak growth in the Eurozone.

The following table shows how the Eurozone economy has performed since the last monetary policy meeting. As you can see, there has been a lot more weakness than strength with deterioration in labor market conditions, manufacturing and service sector activity. The commitment to austerity by European governments will only weaken economic conditions in the Eurozone, which is why the region desperately needs monetary stimulus. However, the ECB could also wait another month before cutting interest rates. The financial markets and European bond yields have stabilized enough to buy the ECB some time.

source: seekingalpha.com

Originally Posted by OscarJP

Hi,

Below you will find an article which I hope will help you answer the question.

It may be a holiday week in the U.S., but with 2 major central banks expected to ease monetary policy on Thursday and the U.S. non-farm payrolls report scheduled for Friday, we should see a pickup in volatility over the next 48 hours. Having left interest rates unchanged at 1% since the beginning of the year, the European Central Bank is now expected to cut interest rates by 25bp to 0.75%. Although the ECB has not dropped hints about their inclination to ease, 82% of the economists surveyed by Bloomberg expect the central bank to cut interest rates. Considering that the news agency surveyed 62 analysts, this is not a small amount. The main reason why the ECB is expected to ease is growth. While the financial markets have stabilized and Spanish and Italian bond yields declined, economic data has taken a turn for the worse. The commitment to austerity in Europe poses a major threat to growth in the second half of the year and if European policymakers want to avoid a deeper recession, monetary stimulus is needed to support the economy.

While we agree that the ECB needs to ease, President Draghi has shown very little indication of his plans to do so and has preferred to keep pressure on European leaders by holding off further measures. The main question for Draghi tomorrow is whether EU Leaders deserve to be rewarded for the banking union or punished for not making progress on a fiscal union. When the ECB last met, Draghi left monetary policy unchanged and said there is only so much a central bank can do. For the past few months, he has held back monetary stimulus to pressure European Leaders into action and based on his comments following the EU Summit, he is pleased with their results. Draghi said EU Leaders made good decisions, delivered tangible results and took a courageous leap of political imagination. Preparing the market for an interest rate cut before it happens is the traditional mode of operation for the ECB under Trichet. However Draghi has not presided over enough changes for us to see whether he follows the same MO and his first rate cut as ECB President came as a complete surprise.

Why the ECB Rate Decision Could be a Win-Win for EUR

Given expectations from economists, the greater risk is no action from the central bank but regardless of the outcome this could be one of those unique situations where the EUR/USD could rally if the ECB cuts interest rates OR leaves them unchanged. Normally an interest rate cut is negative for a country's currency but Europe desperately needs stimulus from their central banks and a rate cut from the ECB could actually induce a rally in risk and in turn the EUR/USD. In other words, the ECB rate decision could be a win-win for the euro. If the ECB leaves rates unchanged, the EUR/USD could be squeezed higher. If they cut interest rates by 25bp, the EUR/USD will probably sell-off initially but recovery in the days that follow as investors look at the addition of stimulus as an antidote for weak growth in the Eurozone.

The following table shows how the Eurozone economy has performed since the last monetary policy meeting. As you can see, there has been a lot more weakness than strength with deterioration in labor market conditions, manufacturing and service sector activity. The commitment to austerity by European governments will only weaken economic conditions in the Eurozone, which is why the region desperately needs monetary stimulus. However, the ECB could also wait another month before cutting interest rates. The financial markets and European bond yields have stabilized enough to buy the ECB some time.

source: seekingalpha.com

thanks for that


EU - are you a buyer or seller?

Hi root-minus

today after decision about interest rate I will sell euro. That's mine opinion.

Regards,

Originally Posted by OscarJP

Hi root-minus

today after decision about interest rate I will sell euro. That's mine opinion.

Regards,

ok, thanks

If we look at the current price action as locked in symmetrical triangle, by the book we are in the last leg towards break out, that also consists with my long term S/R charts I posted earlier and the idea that we reversing down (no highs above 1.2625 should be achieved in the future).
Measuring the triangle (see pic, invert it), if the break appears in 1.2450 area, the fall is to be done to 1.1950...by the book...reality will show...
Just have in mind
MAXJOY

Originally Posted by MAXJOY

$EURUSD Chart.ly - CVecchioFX: Symmetrical Triangle - 1.2480 key for direction Symmetrical Triangle - 1.2480 key for direction

Check the graph from Vecchio, don't forget that Symmetrical Triangles are usually a continuation patterns

Originally Posted by DolceVista

Just to put your comments and views in perspective: would you mind divulging what's your trade size and/or leverage? And what's your total short size so far? Not meant to probe into something too personal but this matters a lot to any casual or passing readers -- a trader who keeps shorting and adding shorts at at least a few standard lots per click (100,000 as 1 lot, or £/$10 per pip so to speak) or even bigger size is vastly different in the widest possible sense from one who trades a mini lot ($1/£1 per pip) or even micro lot.

Trade size - GBP 6/pip
Leverage on account - 50:1
Strategy on EUR/USD - short only
Long strategy - AUD/USD (for risk on trades)

Do you want my monthly return metrics since inception as well?

Originally Posted by DolceVista

Well, unless that use of terms is not in American English, otherwise you have misread/misunderstood the sentence. It's not to fulfill whoever's perspective, but to put things in context. Someone who trades seriously and trades serious money would evaluate their positions and views a lot more differently from someone who trades play money, and so of their views. Is it that difficult to imagine? There are plenty of other quality and less biased source of news out there if you want news.

Didn't Clive mention some time ago that he would like Greg to have a poll to find out how many traders here are trading proper size and how many are trading play money? He was asked to think up the question for the poll by Greg but the issue just quietly disappeared. Perhaps obviously for sensitive people or the easily offended like you.

And by the way, what questions I would like to ask or query is none of your business either. I found your post very intrusive too. Are you a policewoman on the forum censoring what questions can or cannot be asked?

Whether the original poster answers or not is of his own choice and can be telling. None of your business either. Mind your own business!

I have answered your question. I am not sure if you are insinuating that I am trading a virtual account. If you are, rest assured I am not. Sadly, owing to company restrictions, I cannot divulge to you the amount I am trading but rest assured, it is in the $25,000-$50,000 range.

Originally Posted by SharonSS

So posters who report news and give their opinion/outlook is suppose to fulfill your so called perspective? I find your post very intrusive and none of your business. You take what is posted and make up your own mind to what to do despite what others may do or say.

It's ok Sharon - Dolce is pi s s ed off that he is Long Euro. I can only advise him - don't hate the player, hate the game.

Originally Posted by EuroTraderApp

It's ok Sharon - Dolce is pi s s ed off that he is Long Euro. I can only advise him - don't hate the player, hate the game.

Fine, thank you for answering. Now that all is clear.

I am not pissed off, nor am I long Euro. I don't have a fixed bias and am fairly flexible. I trade the swings following the price on charts, and do not trade my own opinions. Euro can dive or fly, both options are fine by me.

Originally Posted by DolceVista

Fine, thank you for answering. Now that all is clear.

I am not pissed off, nor am I long Euro. I don't have a fixed bias and am fairly flexible. I trade the swings following the price on charts, and do not trade my own opinions. Euro can dive or fly, both options are fine by me.

Glad we got that sorted - now lets get back to liquidating our brokers

Hi Dolce, boys and girls,

I understand why u r curious of who are the PROS here with the knowledge and experience to follow and learn, I am to, that's why we are here.

However, I know guys going trough $100,000 accounts down to margin calls just following someones blog posts, simple MACD cross signals or rules like "GABS SHOULD BE FILLED", than they sell their homes and do it again till they end up on the street. Big money does not necessarily mean experience and brains.

That is the reason I always try to submit a chart and reasoning for my bias or positioning, I still learn and I have a long way to go, therefore all comments and suggestions are welcome.
Please do the same guys, so we can all learn, support each other no matter who's LONG or SHORT (that's irrelevant as we all trade different TF's)

Take it easy and don't bite

Love,
MAXJOY

Originally Posted by DolceVista

Fine, thank you for answering. Now that all is clear.

I am not pissed off, nor am I long Euro. I don't have a fixed bias and am fairly flexible. I trade the swings following the price on charts, and do not trade my own opinions. Euro can dive or fly, both options are fine by me.

Originally Posted by MAXJOY

Hi Dolce, boys and girls,

I understand why u r curious of who are the PROS here with the knowledge and experience to follow and learn, I am to, that's why we are here.

However, I know guys going trough $100,000 accounts down to margin calls just following someones blog posts, simple MACD cross signals or rules like "GABS SHOULD BE FILLED", than they sell their homes and do it again till they end up on the street. Big money does not necessarily mean experience and brains.

That is the reason I always try to submit a chart and reasoning for my bias or positioning, I still learn and I have a long way to go, therefore all comments and suggestions are welcome.
Please do the same guys, so we can all learn, support each other no matter who's LONG or SHORT (that's irrelevant as we all trade different TF's)

Take it easy and don't bite

Love,
MAXJOY

Very good said, we are many here to learn and in life you are alway learning something new - specially in such active environment like markets.

What a boring morning. A bit of scalping to be done on the rising yen, otherwise I haven't found anything worth while. Have you?

i'v just gone short ej at 9980 with 10 pt stop cos spiked below support and i'm hoping its sign of things to come - also at TL res on very short down channel

Hi BG, could you post a graph so we can see the setup, thanks for posting your reasons behind the trade
I'm currently Long on $Y, but my TF there is long run looking at Y85-86...If I was online I would short that double top at 80.10...missed it
Good luck on the trade

Originally Posted by biggari

i'v just gone short ej at 9980 with 10 pt stop cos spiked below support and i'm hoping its sign of things to come - also at TL res on very short down channel