EURUSD

two pipeline attacks and a field nearly shut down and it's only up a buck fifty...?? eu needs more than that apparently, a lot more... maybe if those traders read bruces cut and pastes, it'll get up there.

http://www.cnbc.com/id/26127325

Yesterday we Bouth at 1.4925 and EUR/USD Long Target 1.500,and Take 1/2 profit at 1.500, later move stops to Entry

Now
EUR/USD will break 1.500 and take one more1/2 profit near 1.5050

http://2.bp.blogspot.com/_nmIuQsC9b-...mingServer.png

WWW.SAXOBANK.COM

Market Comments
It's tough to attach a label to a trading like we say on Friday, when the USD simply refused to quit and the dollar index saw its largest one-day rally - or move in either direction - in six years. The head-spinning momentum carried EURUSD all the way down through the huge 1.5000 level and saw significant new gains across the board outside of USDJPY, where action was more muted. Of course, the first question that comes to mind when we look at this move is - why? Why so much so fast? The only answer we can come up with is that the move may have been far more about the technical levels falling and market positioning rather than any compelling new developments. With 20-20 hindsight, it's perhaps easy to say that when ranges have persisted for a very long time as we saw from March to the beginning August, the breakout from the range becomes that much more significant as complacent range traders are forced out of their positions and formerly frustrated breakout traders all pile in at the same time. With the USD rally having quickly moved into parabolic mode, the sustainability of the move must be called into doubt in the shortest term and we could see sharp consolidation once the momentum fades. Still, this has been a decisive move and the USD bears have a lot of work to do if they expect the old weak USD trend to resume.
A quick run-down of the ECB meeting from Thursday showed Trichet in a performance that was mostly in line with expectations, as he repeated strong warnings on inflation - especially the dangers of indexation of wage deals with inflation rates and his noting that the "pipeline" of inflation didn't look promising for the immediate future. On the dovish side, he noted that Q2 and Q3 growth looked particularly weak and repeated the message that the ECB has no bias. The German and EuroZone GDP releases on Thursday of this week are likely to show negative growth readings for Q2, in fact. Friday saw a sharp drop in yields at the front-end of the EuroZone yield curve as the market begins to price in more easing from the ECB in the coming 12 months. 2-year yields swooned about 15 bps - a sharp move, but certainly not enough by itself to explain the scale of the EURUSD sell-off. We suspect that the USD strength has at least as much to do with the new Chinese anti-speculation rules and realization that China is now very interested in slowing the Yuan appreciation as its export markets are weakening drastically.
Elsewhere, the high-yielding AUD remained on the weak side against the USD as the RBA statement overnight suggested that rate cuts will very soon be on the table due to a "significant moderation" in domestic demand.
USDCAD blasted higher on Friday in line with the other moves in USD pairs as the Canadian employment report showed a drastic drop in employment rolls (even if the actual unemployment rate confusingly dropped). Tomorrow we see both the US and Canadian Trade Balance numbers. The trend in terms of trade for Canada is rather unimpressive considering the rising price in oil and Canada's rising output from the oil sands. The strong loonie has damaged Canada's economy outside of resource extraction, as Canada has been increasingly at risk of becoming a petro-state. The latest drop in oil prices and CAD weakness will be welcomed by Canada and USDCAD may be on its way to 1.1000.
One of the more confusing developments from a macro perspective is the resilience/rally in equity markets in this market environment as the world economy seems to be performing a more and more synchronized nosedive into growth oblivion. Perhaps the focus on the equity side has been more on energy prices and the salutary potential of easing cost pressures. From where we sit, any optimism at this bend in the road would seem poorly placed, and we would expect JPY and CHF to increasingly benefit if equities head south once again. Considering the geopolitical risks rumbling in the background (whether in the Middle East or in the suddenly hot Caucus conflict and its potential to disrupt oil shipments) on top of the generally woeful economic outlook, the risk aversion trade still has plenty of potential for further volatility. JPY calls are expensive, but EURCHF options are still rather cheap.

Price action at the moment is totally crazy. It's most likely because there are so many pending orders at this level because this is so important support level (somewhere between 4951 - 4966)

I'm not confident yet of being bullish or bearish. But for the moment I'm inclining more towards bearish activity for today. The reason is that I would have thought that we would have 'tried' to challenge the 1.5000 again by now but we have not.

LOL

Seems like consolidation.

UBS Is In Big DOO DOO !!!

Here is the link: I hope others FX traders read this one also !!!

http://www.bloomberg.com/apps/news?p...d=aTXlOq43Y2qE


Bruce

http://www.bloomberg.com/apps/news?p...refer=currency

Folks Trust Me When I Tell You To Read This !!!

Reality has finally returned !!!

I will post One Snippet In A Minute For Those Who Ignore My Request To READ ME :-)

Snippet:

Aug. 11 (Bloomberg) -- Just because the dollar posted its biggest gain against the Euro in almost eight years doesn't mean the U.S. currency won't continue to be plagued by the nation's slowing economy, widening budget and trade deficits and negative inflation-adjusted interest rates.
The 4 percent surge against the single European currency this month was enough to prompt Bank of America Corp. to tell its customers to exit trades betting on more gains. Morgan Stanley still forecasts the greenback will approach a record low by October as the U.S. housing slump and credit-market losses keep the Federal Reserve from raising interest rates this year.
Barclays Plc in London and New York-based Merrill Lynch & Co. said trading patterns suggest the dollar's 5.1 percent gain in the past three weeks measured by an index of six major trading partners can't be sustained.
That's mostly because there's no indication the U.S. will return to the late 1990s annualized gross domestic product growth of 4.23 percent with inflation running at no more than 3.3 percent. Since September, 2000, the dollar has declined more than 44 percent as inflation accelerated to an annual 5 percent today, growth slowed to 1.9 percent and U.S. interest rates provide no cushion for holding U.S. assets.
``I would not chase the dollar's strength versus the euro as the pair has moved beyond interest-rate support,'' said Sophia Drossos, a strategist in New York at Morgan Stanley, who also recommended closing out bets on the dollar versus the currencies of Malaysia and Singapore. ``The dollar is not out of the woods. It will take the market a while to come around to our point of view.''
Unsustainable Recovery
The dollar strengthened to $1.5005 to the euro last week from $1.5564 on Aug. 1, the biggest weekly increase on a percentage basis since January 2005. It surged 2.08 percent on Aug. 8, touching $1.4998, the most since Sept. 6, 2000, and the second largest rally since the euro was introduced in 1999.
Those gains sent the dollar above the $1.51 per euro yearend mean target of 39 analysts in a survey by Bloomberg. By the end of 2009, the dollar will likely strengthen to $1.40 per euro, based on the estimates. It gained 6.4 percent since hitting a record low of $1.6038 on July 15.
In addition to the gains against the euro, the dollar also appreciated 2.3 percent versus the yen to 110.18, the most in eight weeks. The euro lost 1.29 percent against the Japanese currency to 165.38, the biggest drop in 13 weeks.
U.S. economic data suggest that a sustained recovery isn't imminent, said Robert Sinche, head of global currency strategy at Bank of America in New York. Interest-rate swaps indicate the currency should trade at about $1.54 per euro, said Sinche, who still forecasts that the dollar will strengthen to $1.45 per euro by the second half of next year.
Foreclosures, Deficits
The number of U.S. home foreclosure filings more than doubled in the second quarter from a year earlier, according to RealtyTrac Inc., a seller of default data. Government reports this week may show retail sales fell 0.1 percent in July, the first decrease since February, and the U.S. trade deficit widened in June to $62 billion from $59.8 billion.
The U.S. budget deficit, which totaled $163 billion for 2007, is forecast by the administration of President George W. Bush to widen to a record $482 billion for 2009.
Morgan Stanley predicts the dollar will weaken to $1.60 by October, because the faltering U.S. economy means the Fed is unlikely to raise rates anytime soon, Drossos said. That means investors will continue to suffer inflation-adjusted returns that are negative based on the current annual consumer price index of 5 percent and Treasury securities yielding between 1.695 percent for three-month bills and 4.53 percent for 30-year bonds.




Bruce

1.50 AHHH

Thanks for the info Warren.

Quite frankly I really don't care what is going to happen 4th quarter 2008. My only concern right now is 2nd quarter August. LOL!

You can very easily become overwhelmed with all of the news that is out there. Pick and choose what you read carefully. Most of the information coming from Banks and Investment Houses is biased towards there own internal positions. While they are on television they have to disclose those positions, in print they do not.

How many websites do you visit daily Warren??

There is some buying building now. Fought back from -70pips at one point off the Paris open!

Looking to enter long again tonight.

all those people that were finally waiting for the retrace, and lost a little bit of money last week, it's finally paying off, if you still have dollar bear in mind

do you think it's a good time to go long now, since the eu is above the 1.50 mark

will hold E/U longs and U/C shorts and monitor price action...

yes Clouds, paying off now...hopefully bigtime before any continued downside......

all gone?

They got the retrace, we got the trend

1.5025 Bid !!!


Bruce

1.5006 my short was stopped (for good profit) and because price action seems to tell that the bottom was at the resistance, I reversed my position from there (just a small position and tight stop). Let's see if this holds, too early to say.

I don't like picking bottoms very much but this support just seems to be worth testing with my money

Well I'll be.. We did go up, let's see for how long. Shorts out, let's see what the longs will bring.