Trading into price parity....

No doubt, some of you who read this will know about price parity and some won't.

Basically, if the EUR/USD goes beyond $1.50, Europeans would start buying our stocks and our real estate (I am American) and this would pull the EUR/USD back down.

So going long at around $1.50 is suicide. How many times have you considered parity in your trades?

Is parity same as valuation? And nope, I never consider it. It's a very longterm approach.

What I am saying is that EUR/USD won't go above around $1.50.... so going long at $1.50 is suicide. It's a reality we should be aware of. I don't know the parities of other currencies but an economist would.

I can't believe this thread doesn't get more attention. Parity is the upper/lower bound a pair will go to.... it is a formula called PPP used by economists.... so shouldn't we be aware of this price?

I think an MQ4 indicator is called for. This is practical information.

In the event of a fast devaluation of the USD one has to take into account that the US depends heavily on imports (whose cost will rise quickly) as versus the the slow nature of exports to improve (and many of those exports depend strongly on things like imported energy in order to be made and shipped), plus the effects on the consumer part of the society due to the resultant rise in price of consumer goods. Anyway, good thread...
CB

Hello again.

Seems that EURUSD is moving to the buck fifty range..... need to do my homework on whether a heavy short is called for, based simply on PPP data.

Anyone else into this? I've prettymuch said all I need to in the first few posts of this thread.

Cheers.

We are almost at parity with the USD/CAD. By definition, parity exists between the U.S. and Canadian dollar when price is equal. Not so with every pair.
I thoroughly expected some sort of commotion when USD/CAD reached parity. It seemed like it should have been a huge psychological battleground, but the loonie steamrolled right through 'til the pair fell to just over.90 last week. Now, in the sharpest reversal this pair has seen in a while, it is at .985--very close to parity.
If the Euro follows suit it may overshoot 1.50 initially. If it does, it seems like the retrace to parity would be a good quick short.
All this is rather vague observation and speculation on my part. Halifax is the economics heavy, not me.

Can any economist here verify if EURUSD is at its ceiling (give or take)? If so, heavy shorts are almost a no brainer.