EURUSD

Quoting mokonni

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My system - if it looses the winning rate might go down to 72,05 % from 72,06 %

so no big deal for me

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Quoting mokonni

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i survived this: 14988.2 at my broker

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Quoting Warren Forex

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http://www.dailypfennig.com/currentIssue.aspx

Snippet:

And Now... Today's Pfennig!

Central bank intervention is the reason...

Good day... I know most of you opened the Pfennig up this morning hoping to get a blast of Chuck's witty writing style. Well the airlines arranged for Chuck to stay in San Francisco a little longer, so you'll have to wait another day. The currency markets continued to get hammered by the US$ on Friday with the dollar index climbing all the way back above 76, a level we haven't seen since mid February. The dollar did sell off a bit in early European trading, but it has started to climb again as I write.

Several readers sent me an excellent opinion piece by James Turk which appeared on GoldMoney's website. Mr. Turk points to central bank intervention as a major reason for the recent dollar strength. The article agrees with what I was saying last week; that the dollar has no fundamental reason to be rallying. The reports and news out of the US have not been favorable to the greenback, and the twin deficits in the US continue to soar out of control. I mentioned that the recent moves of the dollar smacked of intervention, as the dollar only wanted to move in one direction, ignoring any data which would typically send it back down. Turk points to some data which backs up this intervention theory:

"When central banks intervene in the currency markets, they exchange their currency for dollars. Central banks then use the dollars they acquire to buy US government debt instruments so that they can earn interest on their money. The debt instruments central banks acquire are held in custody for them at the Federal Reserve, which reports this amount weekly.

On July 16, 2008 (the closest date of the weekly reports to the July 15th low in the Dollar Index), the Federal Reserve reported holding $2,349 million of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 million, a 38.4% annual rate of growth. To put this phenomenally high growth rate into perspective, for the twelve months ending this past July 16th, assets in the Federal Reserve's custody account grew by 17.3%, which is less than one-half the growth rate experienced over the past three weeks.
So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff.

You can read James Turk's entire article at http://www.goldmoney.com/en/commentary.php#current. He makes a convincing argument. As Chuck and I have pointed out in the past, intervention (even cooperative central bank intervention) can only impact the markets for the short term. Economic fundamentals will eventually win out, so the central banks have only bought themselves a little time. Unless the economic data in the US does an about face (and I don't expect it to), the US dollar will remain in its long term downward trend.

Friday saw the release of additional US data which would usually have moved the dollar lower, but not in this dollar bull environment. US non-farm productivity slowed, increasing at a 2.2% pace vs. last months 2.6% rate. Unit labor costs came in just under expectations, and wholesale inventories rose by almost 2 times the expected rate. This increase in wholesale inventories is somewhat telling, as companies were unable to sell all of the goods which they were producing. Could US consumers finally be slowing their spending? If so, it would mean an even more dramatic drop in GDP for the last half of 2008.

This week will bring a number of big economic reports here in the US, non of which are expected to be dollar friendly. Tomorrow we will get the Trade balance which is expected to have ballooned back above 60 billion in June. We will also see the monthly budget statement and ABC consumer confidence. Wednesday will bring us the Import price index in the US along with advance retail sales and business inventories. July Consumer Prices in the US lead off the reports on Thursday, followed by the weekly jobless claims. And we will close out the week with the empire manufacturing numbers, TIC flows, industrial production, and Chuck's favorite, the capacity utilization numbers for July. If the reports come in where expected, the dollar bulls may start running for the hills.

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Quoting acumen

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We should see a tennis match around .5000.

The big news on the horizon is GDP.

It will show the zone it lots of trouble.

Keeping it above .5000 will prove quite a struggle.

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Quoting mokonni

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oil is dropping

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Quoting SpecialEd

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Hi Acumen,

Please tell me what source you use for your pivots. I calculate my own periodically, but they never seem to agree with ActionForex. Always off a bit.

Also, in intraday trading, especially after some exceptional event like 8/8/8, what pivots do you tend to place more significance on (Hrly, 4Hrly, Daily, etc.).

Thanks,
Ed

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Quoting mokonni

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oil is dropping

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Quoting acumen

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Hello Ed,

I stole the metatrader indicator that's on my site from someone.

I don't remember who.

If you aren't using metatrader you should be.

It's free and it's the de facto tool for we currency people.

Since I only trade intra day I'm only concerned about how the pivots on the 15 min chart.

Other will chime in with their own recommendations.

Swing traders often use S/R and weekly and monthly pivots.

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Quoting mokonni

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if 850$ was an important support for gold, I think it's broken
844$ on my chart

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Quoting indotrader

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Im short with trailing stop

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