Euro Free Fall without Parachute to 1.10???

Euro Free Fall without Parachute to 1.10???

The friday the euro broke a very important support line at 1.1864, with a very strong down of more than 150 pips in less of 4 hours. Because of this, the horizontal fluctuation band, or as elliotician call this, a flat, is finished. Then we can say that the down trend is back, and the question is for how long. The channel lines in the graphic help. The past year the euro mades a high at 1.3666, will make a new lows till end of year?

The Blue counting and the Red are similar, a difference in the degree of waves and the length of this down. The blue counting is a double zig zag, where the wave C is on progress, with target between 0.618 to 1 of (W). And the red shows a expanded flat wave X, with a wave ((c)) in progress, near to the bottoming.

For anyone who doesn't have Thomson Financial News, I thought I'd post this off their squakbox this evening (ET)

The EUR/USD has managed to stabilize between 1.1670/1.1700, as USD/JPY weakness has given the USD a slightly offered tone. There is talk of a few more stops in the EUR/USD below 1.1670, but option related buying ahead of 1.1650 should prevent a steep fall in the immediate-term at least. Analysts point out that a lot of the HIA EUR/USD selling in recent weeks has been concentrated on Friday"s during the US session and the heavy selling seen yesterday in the wake of the US trade data might have been due to the US holiday today. Assuming we don"t see the HIA selling today there is a good chance the EUR/USD will bounce towards 1.1740 at some stage during the London session on short covering. There is rumoured to be huge selling interest around 1.1800 so any bounce towards the 1.1750 level should be viewed as a selling opportunity while the market is in this mood. The EUR/USD trades 1.1692/97.

Although Thomson isn't always correct with their analysis, probably a good idea to be carefull about shorting eurusd this evening (ET), even though I am of the opinion that the USD has more upside in the weeks & months ahead. Just pull up a monthly chart of eurusd with MACD and see how rare a MACD crossover occurs. Same holds true for usdchf and usdjpy. I am primarily a very short term trader, but I do look at the longer term charts to form a trend bias.

JohnFX

I cought a report on FXCM - DailyFX that suggested the late afternoon dollar rally was prompted by the release of a positve monthly budget statement.

"• Dollar Breaks Records Along With US Trade Deficit
• ECB Confuses Market With Contradictory Statements On Rate Outlook
• Yen Looks Ahead To Tomorrow’s GDP Release

US Dollar - The dollar moved markets today as U.S. data affected the majors across the board. After strengthening over the past few weeks, the dollar fleetingly looked like it may have met its match this morning, posting a record trade deficit along with higher than expected initial jobless claims. September’s trade balance was released at a record $66.1 billion, almost $5 billion more than expected. However, the market quickly brushed off the staggering figure as traders began to realize that the number was heavily affected by the aftermath of Hurricane Katrina. Imports, namely petroleum, surged in price and volume as production in the Gulf Coast was temporarily suspended during the month and energy prices soared to record levels. Comparatively, exports during September dropped by the most in four years. However, as foreign economies begin to improve and a trade agreement with China finally takes place, trade should regain strength in the coming months. Traders additionally restocked dollar positions as the University of Michigan released a far better than expected consumer confidence reading that rose from the previous 13-year low, the most soothing factor for dollar woes this morning. Coming in 5.5 points higher than last month at a reading of 79.9 for November, retailers are predicting strong holiday sales as consumers overcome oil shocks and hurricanes. Finally boosting greenback demand later on in the afternoon, the monthly budget statement for October narrowed, posting more than $10 billion less than September, almost $3 billion less than expected."

This may have been added catalyst to the affects of traders squaring positions before the off day tomorrow that your post mentioned John.


mpotis

my feeling is that we will see 1.2000 again before we see 1.1000.

im dollar bullish, have been for a while. but that may change if we get to 1.1400 on the EURUSD. US rates cant go up forever, and i am going to bet that the ECB raises rates early in 2006....

Looks like an end-of-week stop-hunting mission by the "operators". That's why i scalp forex. Jumped on board and grabbed 10 pips in about 2 min. on 10 lots. Nice way to end the week.


JohnFX

As long as the US keeps raising the interest rates or at least sustaining the rate differential gap between dollar and euro, the downtrend in the EURUSD (daily chart) will stay intact.

Congratulations John. Was this possible because of the slowness of the market today combined with their stop hunting?

Thanks, Steve. Well basically it's due to the fact that my charts are not fed by the same data feed as my Broker. And my broker is InterBankFX. During the closing minutes today I could see prices rising on my charts and volume increasing, but Interbank wasn't keeping up. So I hit their offer and then hit their bid about 2 minutes later and 10 pips higher. I did the same type of trade on Thursday, right after the trade data release and snagged 17 pips on that one in about 1 minute. I use ibfx's MT3 platform.. it's all I need for scalping and works great. As for my charts , I have Sierra Charts with couple MA's on 1 & 5 min. and I watch price action to determine my entries. I have been successful on 76% of my scalps for about 6 weeks now and I intend to continue trading this way. I only trade the eurusd..primarily during the NY session. Obviously today was flat because of the holiday, until the last few minutes of trading. I had a "feeling" they were going to do that so I watched the last hour of trading. Usually, I don't trade much after 12 noon ET.

JohnFX

Do you mind sharing which data feed you use for Sierra Charts?

Oh yes sure.

Track Data Corp. supplies the data for my charts.


JohnFX

[quote=JohnFX]Thanks, Steve. Well basically it's due to the fact that my charts are not fed by the same data feed as my Broker. And my broker is InterBankFX. During the closing minutes today I could see prices rising on my charts and volume increasing, but Interbank wasn't keeping up. So I hit their offer and then hit their bid about 2 minutes later and 10 pips higher. I did the same type of trade on Thursday, right after the trade data release and snagged 17 pips on that one in about 1 minute. I use ibfx's MT3 platform.. it's all I need for scalping and works great. As for my charts , I have Sierra Charts with couple MA's on 1 & 5 min. and I watch price action to determine my entries. I have been successful on 76% of my scalps for about 6 weeks now and I intend to continue trading this way. I only trade the eurusd..primarily during the NY session. Obviously today was flat because of the holiday, until the last few minutes of trading. I had a "feeling" they were going to do that so I watched the last hour of trading. Usually, I don't trade much after 12 noon ET.

Just a little update guys about my new technique iluustrated above. I pulled off another one with today's TIC data release. Upon the number release at 9:00PM ET. the eurusd immediately plunged, but my IBFX was still showing a 1.1696 BID so I hit the BID for (20 mini's). One minute later IBFX caught up with the rest of the world and I hit their offer for 1.1680. Made 16 pips $320 in about a one minute trade. I have definitely added this techniqe to my scapling methods and now look for it.

JohnFX