EURUSD

M5: Cup & Handle senario is out. PA ranged for 2+ hours, and now peeking above mR1 = 1.4120. Knowing their capabilities for fabricating any price they want, the Asian session traders can move the price up to last session's high (1.4177) in a flash, and without much volume. Which, if they do, I'd expect THEN the volume to pour in.....a sign they are shorting. Regardless of whatever high they manufacture, the PA is volume top heavy, meaning the price goes up and THEN the volume comes in. This being the case, it seems they are shorting it as they move the price upwards. How I see it for now.

I'm out right now but want to see how y'all holding up!

Methinks 4350 for starters needs to be revisited and then this post shows the 4500/50-46xx area I'm still looking at, but we're also long past the time when I thought we'd get there...

On the other hand, I didn't think we'd still be this high and in Semi-Limbo either. On that encouraging note of 2 strikes against me, I'm taking a second look at the Daily sma's of the 365, 548, and 730 flavor (one year thru 2 year).

I just don't think we'll consolidate quite this high (plus 1.40's) BUT this 138/140xx level may prove to be the upper edge of a multi hundred pip range at some near point in the future, say late summer to end of year. Still Pondering what the lower edge of that range might be, and losing my charts didn't help.

That said, I still think we have a wild ride ahead of us this summer and it may be awhile before things find a new equilibrium. My eyes are fixed on China tfn...

On that note, don't forget about the BRIC summit in Yekaterinburg on the 16th.. that would be Monday night US time. Big potential for HUGE Verbalvention...

PS 4123 is a QP between the Central and M3, didn't mention it earlier as the range is a bit small, but the convergence with xx20 pych should NEVER be disregarded... I'm doing a smallish short here at 25 wit 18 pip stop, Target is the DP (4075)

Ordering up another 1.4080 Today's special....

Agreed,

Short from 1.4124 - scalp to 1.4088.

Bablo, You could actually have a better target than me if any downside move is weaker than expected... the DP/CP QP is 4090. That was also the first support level on my 3m chart right after the Daily Open...

I just realized that looks pretty confusing. Oh well...

For the Pivot noobs here, the zone between the Central and the Daily Pivot is only a'rd 30 pips wide, not generally enought to worry about, but I usually plot them anyway just in case price stalls there, I want to know why and be ready to bail or enter, whichever.

The whole premise behind the Qp/Sp notion is predicated on weak PA turning and stalling at otherwise insignificant levels. Further explanation is ALL in my posts on pivots that I posted the link to earlier.

SL at BE TP at 1.4088

Bailed at 1.4090

Some forward looking action might bring 1.4000 today

My 1hr chart that I'm working off of thru asia and early Fo/Lo...

White circle holds the 21sma, the lower BB, the 50% retrace, and the 4050 QP... pretty decent Support for a couple sessions.

If price winds up staying stable near the Central thru asia, the MA portion of that set will simply rise thru the evening and get closer to the DP, all the mo betta.

Agree to the 1.4050 and even 1.4040 level support and even short BUY as a scalp

hi guys, am new here and to trade...been reading since 2 days...
am short @1.4020 since 2 days, thought it will break lower and didnt take profit of $100 and $80....
EUR/USD looks upside now...any suggestions?
didnt trade with SLs...will start using that from next trade though

Don't blame you, but i'm still in, based on my 3m/6m.

SL at 4110 now for 15 if it hits it.

Don't let winners turn into losers.

Just some information on the 1.4088 TP.

The number comes from the last high of 1.4265 on June 5 and the last low of 1.3804 on June 8 and the 61.8 Fib. = 1.4088.

I bailed because of volume stalling. That tells me the move is about to reverse. Not to say that it won't come back down to my target but it was a scalp out of bordome. Learned to not be gready and set the SL to BE ASAP.

We have much in common then.

Re: the volume "can of worms"... do you use MT4 for that or some other platform?

Out on the other short for 15, but reloaded at 11 btw... very light and with very tight stops (like 9 pips) , this is "scalping exercise" for staying nimble.

Unfortunately MT4 at the moment. At best it's a guide but certainly not a bible.

For stocks I use TD Bank. Not bad but a lot of room to improve.

I use several other sites stock info.

I'm looking into Esignals and E-Quotes to determine which best meets my needs.

Both are pricy but market depth and real volume can be your best fried for decision making.

Any recomendations?

Out for 1 pip and done with this level... my 6m crossed for a turn back up... but 20m and 1h still slightly down or flat. Out of synch is no trade zone for me in this low momentum.

This session may be more uneventful than I had hoped for, but it's early yet.

Anyway Bablo, methinks you made a picture perfect exit. Well done...

I'm out for the evening. Careful trades...

Forex and Financial Market Update 11 June 2009

By VeriteFX on June 11, 2009 6:39 PM | No Comments

Dollar falls to rising crude, equities, and negative central bank rhetoric:

Once again the dollar was handed more losses to the euro and pound sterling courtesy of crude oil and US equities. The front month crude contract broke the $73 level today, pushing the S&P 500 to fresh 7-month highs. After better than expected US fundamentals (retail sales, jobs) the dollar didn't stand much of a chance against the higher-yielding currencies and their correlated markets as they all made strong upside moves pushing the dollar lower as the USD Index slid back under the key 80 level.

30-year bond auction contributes to dollar weakness--

The strongest move against the dollar came in the afternoon NY session. At 1303 EST the results of the 30-year bond auction were released and it went much smoother than the markets were expecting. What made this a good bond auction which was good for equities, crude, and gold, and bad for the dollar was two main factors:

 

1. Low yield
2. Strong foreign demand

The expected yield for this auction was 4.80% but due to the bidding and healthy demand, the auction high yield was just 4.72% and the 8bps net positive differential between the expected and the actual is very bullish and favorable. If market participants wanted to force the Treasury to pay more to borrow their money for 30-years they would have forced this through a higher yield.

The other factor that made this auction go well was the indirect bidding which came in at 49% vs. an average of just 25.8% and a full 2.6% higher than the previous. Indirect bidders are those from foreigner nations like China and Russia and the fact that foreign sovereign money-flows showed a healthy appetite for US debt helped rally Wall St. and sinking the dollar.

Now despite the strong gains made after the 30-year bond auction this afternoon the equities market dropped into the close which is further proof that participants need news and positive fundamentals to keep buying and once the euphoria wears off, prices drop again. The S&P 500 failed again to close above the key 950 level and this has been a reoccurring theme this week. As I said in yesterday's update I am not a believer in what we're seeing on Wall St. but I'm not about to go against the flow either...

Fed wants dollar to continue depreciating:

Around 1350 EST Atlanta Fed Lockhart gave the markets with more anti-dollar rhetoric:

"USD role as reserve currency may decline; not made up mind yet to increase Treasury purchases"

As soon as those comments from Lockhart hit the wires the dollar took another hit and his rhetoric helped send the euro and pound sterling to their highs. Basically there wasn't a single fundamental, geo-politcal, or market correlation reason to buy the dollar today, it was pressured lower from every side. And reading between the lines on Lockhart's comments I believe what he's saying is that he is open to the idea of seeing the Fed monetize more sovereign debt which is obviously a very USD negative factor.

The Fed still wants the markets to sell the dollar, it's clear as day. When the Fed starts talking about the possibility the dollar will be removed as the world's reserve currency I do not see how it gets any more obvious they want the dollar to continue depreciating in the near-term. In recent years the Fed has not made a single mention of the dollar potentially being dethroned as currency king of the world and now they are changing their tune and I believe this is the Fed's way of assaulting the dollar but in a somewhat subtle manner.

The Fed obviously can never came straight out to tell the markets to sell the dollar, geo-politics don't quite work that way but the smart money, who are the real market movers, know how to read between the lines and they know better than to go against the Fed. And I'm the same exact way... no, my two or three standard lot contracts aren't moving any markets but I know better not to fight the Fed and as bearish as I am on the euro at least the ECB is doing what they can to talk the euro up. The ECB has done nothing lately from a monetary policy perspective or with verbal rhetoric to depreciate the euro like the Fed has been doing to depreciate the dollar.

From a pure monetary policy standpoint the Fed and ECB diametrically opposed to one another. The ECB has acted to make sure the euro still yields at least 75bps more than the dollar, they have not gone down the path of monetizing sovereign debt, they are not running the printing presses to pump euros into the money-supply, their credit standards are tighter than the Feds and overall the ECB has a stricter monetary policy when compared to the loose and sloppy path Bernanke has taken the Fed.

When you combine all of those monetary policy and geo-political factors in addition to the factor of the Fed clearly telling market participants to sell the dollar on its strength you have a situation where the euro continues to gain on the dollar despite some horrific fundamentals in the Eurozone. Almost every day a trader will ask me when I know it's time to change my anti-dollar bias to an anti-euro bias and the answer is simple -- when the Fed stops telling the markets to sell the dollar or when the ECB starts telling the markets to sell the euro.

There may be a season in the near future where the ECB joins the Fed to use monetary policy and verbal rhetoric to depreciate the euro and if I see both central banks starting a currency war I'll likely stop trading the EUR/USD and focus on another pair more exclusively but until then I'll do exactly as the Fed is telling me to do and I'll keep selling the dollar, it's been too easy to do anything different than that the past two months.

Battle of the worsts--

The Fed is in a bit of a currency war with the BOJ right now and that's the main reason I refuse to even look at the USD/JPY let alone risk a trade on it. Out of all the major world currencies the US dollar and Japanese yen are the two worst of all. Both US and Japanese fundamentals are deplorable and both central banks want their respective currencies to tank, so trying to trade a currency where both the dollar and yen are paired together makes no sense to me right now because there's no clear bias either way, it's literally a battle of the worsts and a race to the bottom.

In the end, it doesn't matter what any chart or indicator might say, until the Fed wants the dollar to stop depreciating or until crude oil falls off a cliff, the euro and pound sterling will stay on course and keep beating the crap out of the dollar, it can't go any other way.

Is anybody here long a long term trader?

I heard from a pretty reliable source (myself haha) that Euro could hit 1.3300 soon.

What do you guys think; any chance?