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  • #181,481
  • Jan 15, 2010 6:19am Jan 15, 2010 6:19am
short DAX at 5928 aiming for 21 or below.
wanting to short € soon as well waiting for it to retrace up a little for a better entry
Trade on your own risk Plan your trade&trade your plan dont be a
  • #181,482
  • Jan 15, 2010 6:23am Jan 15, 2010 6:23am
Fundamental question of Core CPI: why if a country's rate of inflation is bigger than expected is going to be good for the currency (it apreciates). My economic logic tells me that if the currency can buy less things then it should loose ground against other currencies (devaluation).
On the other hand I can think that if prices reflects an excess of demand for goods and services then an apreciation could be logical as a way of showing a more healthy economy.
I ask this cause the intrest rate exdplanation doesn't fit this scenario of flat rates.
Thanks for your time guys!
  • #181,483
  • Jan 15, 2010 6:30am Jan 15, 2010 6:30am
Quoting maurofx
Fundamental question of Core CPI: why if a country's rate of inflation is bigger than expected is going to be good for the currency (it apreciates). My economic logic tells me that if the currency can buy less things then it should loose ground against other currencies (devaluation).
On the other hand I can think that if prices reflects an excess of demand for goods and services then an apreciation could be logical as a way of showing a more healthy economy.
I ask this cause the intrest rate exdplanation doesn't fit this scenario of flat rates.
Thanks...
Easy - you ask why, I'll tell you why - interest rates. Inflation (in rational amount of course) means that the economy is doing well, if the economy starts doing well, we are all happy. We are happy and we spend, we spend, inflation grows, central bank needs to make credits more expensive to regulate growth, so that we don't get hyperinflation and a bubble burst (too fast).

That's it. Higher interest rates means better payoff on the currency, means there is more demand for that currency, that's why the currency gains.
Greed and impatience are our greatest enemies.
  • #181,484
  • Jan 15, 2010 6:31am Jan 15, 2010 6:31am
Quoting maurofx
Fundamental question of Core CPI: why if a country's rate of inflation is bigger than expected is going to be good for the currency (it apreciates). My economic logic tells me that if the currency can buy less things then it should loose ground against other currencies (devaluation).
On the other hand I can think that if prices reflects an excess of demand for goods and services then an apreciation could be logical as a way of showing a more healthy economy.
I ask this cause the intrest rate exdplanation doesn't fit this scenario of flat rates.
Thanks...
Simplest explanation: inflation is a harbinger of rate hikes.
  • #181,485
  • Jan 15, 2010 6:37am Jan 15, 2010 6:37am
Thanks guys. I understand that, but if we know that de FED ain't gonna rise the rates, then a higher rate of inlfation shouldn't rise the value of the dollar for example... Do I make my point??
Tks for your time mates!
  • #181,486
  • Jan 15, 2010 6:41am Jan 15, 2010 6:41am
Quoting maurofx
Thanks guys. I understand that, but if we know that de FED ain't gonna rise the rates, then a higher rate of inlfation shouldn't rise the value of the dollar for example... Do I make my point??
Tks for your time mates!
the FED said they wont raise rates on current expectations but if it is higher then expected then it may change the fed's view in raising interest rates.
  • #181,487
  • Jan 15, 2010 6:44am Jan 15, 2010 6:44am
Quoting maurofx
Thanks guys. I understand that, but if we know that de FED ain't gonna rise the rates, then a higher rate of inlfation shouldn't rise the value of the dollar for example... Do I make my point??
Tks for your time mates!
It's simple. My Econometrics teachers said it best " We economist think backwards" pretty much it's the opposite of logic most of the time. It is confusing but thats what it is
  • #181,488
  • Jan 15, 2010 6:44am Jan 15, 2010 6:44am
Quoting maurofx
Fundamental question of Core CPI: why if a country's rate of inflation is bigger than expected is going to be good for the currency (it apreciates). My economic logic tells me that if the currency can buy less things then it should loose ground against other currencies (devaluation).
On the other hand I can think that if prices reflects an excess of demand for goods and services then an apreciation could be logical as a way of showing a more healthy economy.
I ask this cause the intrest rate exdplanation doesn't fit this scenario of flat rates.
Thanks...
The problem that is emerging is this as I see it: The contraction that began in the US in 2007 has spread globally. As the manufacturing and production base shrinks due to restricted credit, the "too big to fail" mentality is justifying QE or "competitive devaluation." These two ideas conflict with normal economic cyclical tendencies.

Eventually, all the global currencies begin chasing a smaller quantity of goods and services at a faster rate, but I think there has to be some trigger for the release of the flood of money and then the acceleration of the Velocity of money - which does not reflect a healthy economy as much as it does the inherent instability. Right now, the money is being held back. When it starts to flow, there will be a tidal wave of inflation...I think the trigger may be a bond market sell-off, triggered by a Long Term Mgmt Capital type collapse similar to the stock mkt crash in 2008.

When the next big event comes, I think all hell will break out in the FX markets. All the charts in the world will become virtually useless when dealing with the volatility to come.

We all know the current system is unsustainable and living on borrowed time.
  • #181,489
  • Jan 15, 2010 6:45am Jan 15, 2010 6:45am
Quoting maurofx
Thanks guys. I understand that, but if we know that de FED ain't gonna rise the rates, then a higher rate of inlfation shouldn't rise the value of the dollar for example... Do I make my point??
Tks for your time mates!
But we don't know that - no one really knows except the FED. What we do know is that want the rates low for as long as possible per policy. However, their hand will inevitably be forced due to inflation - forcing a rate hike. We just don't know where that tipping point is....all we know is that we are closer to a rate hike today than we were yesterday, and the day before that......near zero rates are insustainable.
  • #181,490
  • Jan 15, 2010 6:48am Jan 15, 2010 6:48am
Are these really two similar inverted hammers on 1H chart? or my platform bacame mad?
PS. Sorry can not post charts from this PC.
  • #181,491
  • Jan 15, 2010 6:48am Jan 15, 2010 6:48am
Quoting TraderMark
The problem that is emerging is this as I see it: The contraction that began in the US in 2007 has spread globally. As the manufacturing and production base shrinks due to restricted credit, the "too big to fail" mentality is justifying QE or "competitive devaluation." These two ideas conflict with normal economic cyclical tendencies.

Eventually, all the global currencies begin chasing a smaller quantity of goods and services at a faster rate, but I think there has to be some trigger for the release of the flood of money and then the acceleration...
I think that the additional volatility is likely, as we have actually seen a decrease since the onset of the crisis - however, I don't believe charts will be "worthless". The swings will just be wider, and in briefer time intervals - still tradable.
  • #181,492
  • Jan 15, 2010 6:49am Jan 15, 2010 6:49am
hey simple question!

What are the chances of eur/usd pair to move higher during American Session?
  • #181,493
  • Jan 15, 2010 6:52am Jan 15, 2010 6:52am
Quoting kilalik
hey simple question!

What are the chances of eur/usd pair to move higher during American Session?
50%
Greed and impatience are our greatest enemies.
  • #181,494
  • Jan 15, 2010 6:52am Jan 15, 2010 6:52am
two hammers
Attached Image (click to enlarge)
Click to Enlarge Name: eurusd.gif Size: 39 KB
  • #181,495
  • Jan 15, 2010 6:54am Jan 15, 2010 6:54am
Quoting Rabax
50%
lol i know that it's 50/50 but really in your professional opinion.

the market has been shady lately
  • #181,496
  • Jan 15, 2010 6:55am Jan 15, 2010 6:55am
Quoting DrForex
two hammers
Thanks Buddy!!!!
  • #181,497
  • Jan 15, 2010 6:55am Jan 15, 2010 6:55am
Quoting kilalik
hey simple question!

What are the chances of eur/usd pair to move higher during American Session?
55% may by the us figures come again a little bit weaker. That should be god for eurusd
  • #181,498
  • Jan 15, 2010 6:56am Jan 15, 2010 6:56am
Quoting kilalik
hey simple question!

What are the chances of eur/usd pair to move higher during American Session?
Momentum still favors the downside currently. I'm short on the M15 (got in at 4490). Could reverse, but no signs as of yet.
  • #181,499
  • Jan 15, 2010 6:56am Jan 15, 2010 6:56am
So far easy oneway movements in crazy friday . shorts contunued since morning & not checking frequently .should have some action at this level before continue bear again.
fontu
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Not understand?better not follow my analyses!doubt clearer first, risks ++
  • #181,500
  • Jan 15, 2010 6:57am Jan 15, 2010 6:57am
From time to time - I like to read the Technical Analysis Reports from Karen Jones from Commerzbank AG.

http://cdn.forexfactory.com/images/attach/pdf.gif 2010-01-15_dailyd.pdf (363.4 KB)

Unfortunately it is written in GERMAN Language - but as we have got some guys here in forum - which do have some practise in GERMAN as well - I will post it here...

For those who are interested to get that in ENGLISH they have to ask for at COMMERZBANK LONDON BRANCH for an English issue - which is available there as well.
Attached File(s)
File Type: pdf 2010-01-15_dailyd.pdf   363 KB | 570 downloads
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