EURUSD

Hola Mick. I have been reading some of your passed posts. Will you give me more info on the profeesional group you trade with. http://www.forexfactory.com/showpost...56&postcount=9

it can work well , time will show

On the H4 chart its also forming a potential up trending channel. See yellow lines which it has to break in order to test recent lows. Its still holding.

Hi Lawgirl21

ok thanks I will check it out.

this supertrend indi sounds interesting too. lets see how it works in choppy markets.

couldnt find a lot on google, but try this

Google:
tradingsystemforex supertrend

Do you know the same people teaching you these methods are the same people teaching the market makers what you do based on these candle formations.

steve Nison ADMITTS IT

I agree, and have some similar lines on my H4 as well, was just noticing this H1 possible channel. As you mention, and we agree it has to break that ascending TL forming the bottom of the H4 channel if this H1 channel is going to actually materialize. Right now PA is just static, may have to wait until Tokyo opens to see some movement.

FX University Daily: Tuesday, February 23, 2010


Euro Saga Continues

Exclusive Interview with Exotic Trading Expert Tells
You How to Play the Most Oversold Currency On Earth



Good day traders!

The euro has been on the rails for a while now.

But long before this euro news hit every major paper in the world, my colleague Evaldo Albuquerque was predicting the dollar would rally, and stocks and the euro would tumble.

In case you don’t know Evaldo, he’s a recent MBA, who spends every waking hour tracking the $4 trillion foreign-exchange market. Specifically, his small niche in the FX market revolves around the more overlooked, out-of-the-mainstream “exotic” currencies from emerging markets around the world.

This week, I sat down with Evaldo to find out the latest in this long euro saga and how to play what is now the most oversold currency in the Forex market. Read on to hear his full interview…

So the euro crisis…how did it all begin?

Evaldo: The origin of the euro crisis goes back to the credit bubble. During those years of global credit bonanza, governments from countries known as the PIIGS (Portugal, Ireland, Italy, Greece, Spain) were overspending.

It was easy for them to overspend because they could borrow at very low rates. That led to inflation.

Worker’s wages had to rise to compensate for the higher inflation. But this higher labor cost made their exports more expensive. More expensive exports meant they lost more customers. Soon these countries were importing more than they were exporting. That led to a deficit.

Germany, on the other hand, did not overspend. They were able to keep inflation down during the years of the credit bubble. They also implemented a labor reform that kept wages down. So while German labor costs remained stable, the labor costs from PIIGS increased by over 30% since 2000.

And remember that they all use the euro, so the PIIGS can’t make exports cheaper by devaluing their currency as Brazil or Switzerland can. If the PIIGS had their own currency, they would just print money to pay their debt. Leaders in the PIIGS could increase the money supply and devalue their currencies, making their exports cheaper.

The increase in external trade would help boost the economy. But they can’t do that because they can’t print euros. So the only way that the PIIGS can become competitive again is through a painful process of internal adjustment. They will have to cut wages and increase taxes.

The EU Achilles’ Heel

What would say is the EU’s biggest problem?

Evaldo: Their biggest problem? They don’t have an effective way of controlling fiscal policy. They do have the Maastricht Treaty that limits national deficits to 3% of GDP. But they don’t enforce that law at all. Greece’s deficit to GDP is over 12% now.

As I mentioned before, they have an internal imbalance in all these problem countries. Unfortunately, the European Central Bank now has to apply the same monetary policy to countries in very different situations. While current interest rates may be appropriate for Germany, they are certainly too high for the poor countries of the union. In this case, one size does not fit all.

What’s the latest in this crisis?

Evaldo: This past weekend there was a report in Germany's Der Spiegel magazine that said Germany was working with its European Union partners on a package of guarantees and loans worth 20 billion to 25 billion euros. But a European Union spokesperson denied on Monday that any aid package exists. They are saying Greece never made a request.

So there are a lot of rumors that Germany will rescue Greece, but there’s no official statement from Germany. When it comes to Greece, there’s zero transparency.

Do you still think they’ll get a bailout – especially after the “informal summit” in Brussels two weeks ago?

Evaldo: I think they will get some sort of loan guarantees from Germany and other big economies from the union. They know that if Greece defaults they will have a major crisis.

Borrowing rates would go up for the rest of the PIIGS, sinking them even more into debt. It’s also estimated that half of the PIIGS debt is being held by major banks in Germany and France.

So if Greece defaults, those banks would have to take a loss. That would intensify the credit crunch in Europe.

How Traders Are Responding to This Mess

Right now, how are traders responding to this euro news? Are they still overwhelmingly bearish?

Evaldo: The chance of a default is declining. In the last few days, the price of insurance against default of the PIIGS has been falling. So the market seems to be less nervous. The euro now seems to be stabilizing at the 1.35 level. But because of the lack of transparency, there’s no really reason for the euro to recover at this point.

Do you think the euro is oversold at this point?

Evaldo: YES, the euro is oversold. And that’s why traders need to be careful with any short position in the euro. Any official news that Germany will rescue Greece will send the euro higher really fast.

So as an exotic trader, why do you care about what’s happening with the euro?

Evaldo: I care about what’s happening with the euro because I trade the euro, without actually trading the euro. There are four exotic European currencies that tend to follow the euro closely. So if I think the euro is going to fall, I sell those currencies instead of the euro. It’s a strategy we call “echo trading.”

Why trade these “echo currencies” rather than the euro itself?

Evaldo: Because those currencies follow the euro, but they move faster. Traders tend to ignore exotic currencies, because they’re less liquid. But less liquidity also means they react very strongly to any news that comes into the market. So because they move faster, you can grab more profits trading those exotics than a regular major currency like the euro.

Tell me how you have used this strategy in your service, Exotic FX Alert…

Euro: Still a House of Cards Ready to Fall

Evaldo: In January, for example, we had a trade on the Hungarian forint. I saw that the price of insurance against a Greek default was rising, but the euro was not falling. That didn’t make sense because if the market perceives a higher risk of default, the euro should be falling.

So I knew it was only a matter of time for the next leg down in the euro. But my subscribers did not short the euro, they sold the Hungarian forint instead. The forint fell with euro, but almost twice as fast.

What would be your advice for traders and investors looking to capitalize on this euro crisis?

Evaldo: I would be careful with short positions at this point. The euro is oversold and we may see a rebound in the euro in the coming weeks. I’m still bearish on the euro, but right now I would rather wait for the euro to rise a little bit, before selling it again.

If the risk of default goes down because of an aid from Germany, for example, the euro will rally. But I think that won’t last too long. Later in the year, the market will realize that Europe will grow very slowly because of serious issues in the PIIGS. When that happens, the euro will fall again. It’s only a matter of time.

That’s it for today. But I’ll be back with the latest on this euro crisis later this week.

Till then – Good Currency Investing!
Kat Von Rohr, Managing Editor
FX University Daily

I call it Pinbar

but since we are in a downtrend I wouldnt recognize this one as important.

Anyway Im going to study these Pinbars on D1 soon


CHEERS

well it was a nothing day, and I even made money on my euro shorts....

fancy that...market up.... and some currencies lagging. Tis a big warning sign people!!!!

I think...something is coming...yes.... Wednesdays are notorious for nothing days and we go it....

but Thursdays are big days on the market, and i think we will see something

I can feel something BIG coming, Who here agrees??.

I've been experiencing a massive yet intermittant rumble all day long - likely a harbinger of things to come. Might be the breakfast burrito I had earlier though.

my impression is right now the euro is being held up. I think everyone is starting to fall for the ole trend reversal trick. Something big is going to happen and it's the euro in the 1.20's by mid March. Gold is also going to come down and smash through 1050.

he he LOL....

Like having 2 hungry jacks breakfasts.....that loosens me right up

i am worried about that hangman in the USD dollar. But still would love the dollar to come in a bit then rocket back up.... A good scenario.

CABLE = looking for the 1.55 area to SHORT

EURO = no deer in headlights here.... add to shorts as we break 1.35

AUD = Aussie $ looks freaking good!!! Will sell short rallies to the high 89's sayyyyy 0.8970 - 0.8990

good luck today traders.

Be it end of hour end of day or end of week or end of month the momementum starts running bear because we are in a bear trend of wave 3

they are trying to slow it down and retrace and play out 3 times in time corrections and flat corrections

Until it breaks loose from them and causing short C at .786 another fib magic they dont tell you about

So I agree end of week and end of month


WHOOOOPPPieeeeee

THere Is NO Price CHEAP to SELL

I think tomorrow we test the low, and depending on the news, break through.

Well I have had 6 trades, 5 were short
4 winners

but i hate such days:
nothing nothing - zigzag zigzag - nothing nothing

I have 3 short postions right now all at different entries, thinking maybe I should close all 3 and break even or let them run, everything I see say trend still down.

Ok, I've been and still remain VERY bearish (Since the trend is) on the EU. That being said it looks like this needs to correct further before making a new wave down. A break and close below 3500 will negate this thinking if this happens tonight.

First off we've got to look at the daily candles... We have a hanging man on the USD/CHF and an Inverted hanging man on the EUR/USD which signals a turn/correction of some sort.

On the 4hr we have what looks to be a bearish signal on the EU but when we look at the USD/CHF it looks more like a hanging man which (I know it's not perfect) would be bearish on that pair.

Taking all these in I believe we will have more of a correction coming unless the TL on EU (Channel line) gets broken with a close below 3514/3500.

Just my 2c.

Don't say it too loud or someone might hear you, but that would bring me some profit, currently short.