DislikedIf all are positive with the exception of USD, the effect is EUR positive.Ignored
I think there must be data available for all the indices coeficient to set the threshold for the correlation with EUR strength.
EurAnalysis Kindergarten 24 replies
DislikedIf all are positive with the exception of USD, the effect is EUR positive.Ignored
DislikedRekon, if you remember the formula to calculate USD Index I moved to Kindergarten, you can use the same formula. The most weighted against USD is EUR if I am not mistaken the coeficient is .546 then Japanese Yen.
I think there must be data available for all the indices coeficient to set the threshold for the correlation with EUR strength.Ignored
DislikedHi PT,
Can you please help me out with these indexes? What is the effect on EUR if they are positive?
SPX500
AUS200
ESP35
FRA40
GER30
ITA40
NAS100
SUI30
UK100
SWE30
HKG33
JPN225
UKOil
USDOLLAR
US30
USOilIgnored
DislikedOK the next logical step is to incopotare the demand and supply for EUR as this has direct impact to the exchange rate. COT report should be fine or if PT has more informative sources.Ignored
DislikedHi Rekon,
Based on historical correlations, all the equity indices you mentioned would have a positive effect on the Euro if they were positive. However, there are many exceptions. For example it is quite possible for the US equity indices to be positive and still have a negative Euro. We saw this in 2010 and earlier this year. Just because something works in a certain way 90% of the time, it does not mean it has to work that way for the other 10%. Also the 90/10 split could become 50/50 or some other number in the future. Markets are dynamic...Ignored
DislikedThat will be the next homework for Rekon to include Bank Rate, Asset Purchase, bailout etc. I just need read his homework laterIgnored
Fed Officials For QE3:
Fed Chairman Bernanke was quiet this week, although he must have had a lot to say in to the members of the Senate Finance Committee in a closed door meeting on Wednesday afternoon.
In conclusion, I’m still bullish on the EUR as recent developments in Spain do not worry me one bit. I expect to see EUR continue its rise after this week’s much needed consolidation as I have set my upper target for EURUSD at 1.3488 level, as both technical and fundamental analyses support upward breakout on the Euro, not mentioning the QE3 effects from the Feds. As far as USD is concerned, I expect to see further weakness in the currency, because there is no reason to be buying the dollar, not on the heels of QE3 announcement. If history is of any indication, QE2 pushed USD down by 1000+ pips against EUR in a period of 2 months, although this time around we may not see such intense move, but the overall direction should still be short the USD. GBP is likely to recover further, therefore it is definitely a BUY on dips as UK’s economy improves. The key will be on the October Q3 GDP release next month, as it will probably determine whether or not GBPUSD will go to the 1.70s… JPY is gaining on the back of a weaker USD, but when compared to EUR, GBP, or even AUD, we are seeing weakness manifesting. My view is definitely to SELL JPY on rallies, and considering that JPY has stalled around the current levels for about a week, any short JPY trades (except against USD) should yield decent profits. CAD is gaining on the back of weak USD and strong commodity (crude) prices. I’ll definitely buy CAD on dips, or SELL USDCAD whenever it reaches resistance (around 0.9800 for now) areas; note that this is a ranged pair, so use smaller targets. AUD and NZD are likely to remain bid, as weaker USD and stronger EUR drives the overall market. The direction is definitely buying them against USD and JPY, but stay away from European crosses (such as EURAUD, GBPNZD) as they may not be straight forward. SNB diversified into AUD this week by selling EURAUD pair, liquidating some of the Euros accumulated in the defense of EURCHF peg. This means that CHF was allowed to strengthen, which confirms my view that we should BUY CHF on dips, or SELL USDCHF on resistance whenever possible…
Here’s the list of tradable releases for the week:
Even though this is not a busy week with only 3 news releases scheduled, the current market tension and the slew of stimulus measures announced in the past few weeks could add more volatility, not mentioning that some of the most volatile weeks that I’ve seen were weeks with light news dockets.
Thanks,
Henry Liu
CurrencyMan: This is a informed opinion. Always make up your own minds even if you think someone has the answer. I am not sure he is right however I have taken note and am aware of his views. I will watch price action, new data, direction of Oil, Gold and Equities markets and always be ready for a surprise or unexpected event.
DislikedSome are saying still long and others are saying short for EU. I think the next week probably will be a ranging week from the lows and highs of the previous week. It may start moving toward a direction at the end of the week due to a extremely heavy news week the next week. Either way I expect it to touch the high again or the low again to make a run one way or another.Ignored
DislikedI don't get it. Your link about COT futures says to take the same positions as COT data shows, so if commercial users are short cable then I should be short too?? I always thought we need to take the opposite positions of what the COT. So if it shows people going long I should actually go short as it is the path of least resistance. Anyone care to elaborate?Ignored
DislikedCOT indicator is more useful in a larger time frame like Weekly. It is leading indi which shows you the big future positions. Now if I go by the example showing in the page 4 of the guide it clearly shows you how the position size increases and what was the effect on price.
You can derive the conclusion based on the example.Ignored
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