EURUSD

I know exactly what you mean!

Totally right..I was just following my plan...wait to reach 1.41 and go long till the 50 fib...then...watch what comes...Thank you Knuck.

Chicky where are you??? how´s your new system doing?

Knuckle,

As a general rule, I tend to agree with the "Friends don't let friends drink and trade" mantra. But there's a certain level of drinking which is actually productive. I know I sometimes get too attached to my current or previous trade.

Mind you, it's a careful and dangerous balance.

here we go fellas watchout..

Took partial profit at 1.4140 and SL changed to 1.4115...profit..

Forex and Financial Market Weekly Outlook

By VeriteFX on May 31, 2009 4:11 PM | No Comments

This is one of those crazy weeks where we have a mega ECB/NFP event, several other central bank interest rate events, speeches by Trichet and Bernanke, and key inflation data releases. Instead of trying to cover every event in the outlook, I'm going to mostly focus on what's happening with the US dollar as the dollar has taken center stage right now. We'll finish things off with a look at the big fundamentals on the books for this week...

Fundamentals and strong market sentiment drag dollar lower:

In last week's trading the dollar was absolutely brutalized against the majors, especially against the commodity currencies. Even the Japanese yen managed to recover against the dollar which is pretty sad considering how fundamentally weak the yen is overall. The yen gained on the dollar by almost 2% on Friday.

Against the dollar, the euro made its biggest one week gain in 8-months, the highest monthly gain in 2009, and its first sustained move above the 1.4100 level in 5-months. Just in the month of May the dollar lost over 6% of its value against the euro and the pound sterling gained over 9% on the dollar. And just in last week's trading commodity-linked currencies like the CAD, NZD, and AUD all gained 2% or more against the dollar with the biggest gainer being the NZD as it appreciated 3.5%.

You may recall this from my 21-May update:

And for the ten kabillionth time I'll repeat the same mantra I've been repeating for a month -- DO NOT BUY THE DOLLAR. It's not worth fighting the fundamentals, the monetary policy, and the actions of the Fed.

The reason for my anti-dollar trading bias and why this has shown to be the proper trade is based purely on fundamental factors which has led to a strong surge of anti-dollar sentiment and rising tide of dollar-selling conviction.

Anti-dollar fundamental and market correlation factors--

 

1. Overall, commodities surged across the board to make their largest monthly gain in 34-years
2. Crude oil advanced by 30% in May and sustained a break above the key $60 level
3. The S&P 500 gained 5.31% in May
4. The Dow Jones gained 4.07% in May
5. US equity index's posted three consecutive months of gains
6. US dollar Index plunged 6.36% in May
7. Gold closed up at an all-time high on a monthly basis
8. Silver gained over 27% in May
9. US consumer confidence reaches 7-month high

I could go on and on with all the percentages but the point is that those are the underlying fundamentals of the market which directly correlate to the value of the dollar, especially the S&P 500 and crude oil which clearly pointed to a lower dollar and continue pointing in that direction at least in the short-term. It's important to always remember the relationship that exists between crude, the S&P 500, and the US dollar Index... the latter two are the gods of war of all financial markets while crude is the great prognosticator of risk appetite and price valuations for higher-risk and higher-yielding assets classes and tradeable markets.

Anti-dollar geo-politics--

 

1. The US deficit quadruples to $1.85 trillion
2. China issues warning against the depreciating dollar, the dollar's status as reserve currency, and a decreased demand for US debt instruments
3. China surpasses the United States as Brazil's biggest trading ally, an important step for emerging markets
4. BRIC nations discuss using local currency for trade instead of US dollar and question dollar's viability as a reserve currency
5. US sovereign debt faces possible ratings downgrade based on the ballooning deficit and printing of money
6. OPEC sets a price band for crude at $75 per barrel in 2009
7. China reiterates its desire to potentially create a new international reserve currency to replace the dollar
8. Fed monetizing $300 billion of US government debt
9. Fed telling the markets they may buy more US government debt in the future
10. Asian nations reallocate sovereign reserves away from US Treasuries

In my view those are just a few of the main fundamental, geo-political, and market correlation factors that I see leading the dollar lower and why I have such a strong anti-dollar bias. I realize I repeat some of this stuff over and over but I think it's important we all keep these underlying fundamentals in the front of our minds as we make our daily trading decisions.

Those factors are all well and good to explain exactly why the dollar's plunged, but as we traders know currencies don't just move in a straight line or trade in one direction in perpetuity. I'm 100% bearish on the US dollar but this does not mean I believe currencies like the euro or pound sterling are strong. Now lets look at the following--

Locked a 3-pip profit in w/ a stop-loss. Woohoo!

Ok I just closed 50% I hope your on the ball.

I closed my order now...Fibs...now I got your message..Thank you very much.

Rednose, I am at the sidelines. Watching PA on 1H, wil go with the trend as it develops. I love consolidations. There is always a trend after one.

Could get interesting in a few. I have been counting on the big bulls to push through the resistance at 4150. Bullish ticks still outstrip bearish ticks, but volume is down...

Make funny of it if you want...tell me how you did it later bozo.

Thanx I just wanted to hear from you...

http://www.forexfactory.com/images/icons/icon14.gif

You were doing it right, but don't do it drunk. Nothing will happen today that you can't trade tomorrow. Dude have another beer and enjoy the show

I am taking my 15 pips and going home until we cross 4160...

I wonder why dollars are getting weaker.

Can be 2 reasons:

1. Bullish sentiment on EU
2. Give me a chance to get better entries for my shorts.

I'm pretty sure it is the last one.

You're right. It has nothing to do with the fact that the Fed is losing it's a## on the distressed mortgages it bought.

I´m off for today...."watching day"....35+ pips was ok...tomorrow we´ll see...

+35 pips is "OK"?

I was happy with my 15!