GU, GJ and EU Analysis Thread

Aussie Dollar chart.

Not a pair I trade often but a buy order I had set since the 2nd Aug at 0.8864 was triggered yesterday and TP was hit 0.9001 today. Didnt expect it bounce straight of 8864 but thats how it is sometimes...nice... Im waiting for a pullback to 0.9001 for re-entry with targets of 9184 and 9380.

Thought it might be of interest for those who fancy a change in pairs occasionally.

Stocky

This morning’s selloff took us down to 1.55/ 200daily MA a stone’s throw away from 5470 monthly support. I have opened a medium term long at 1.55 and moved stop to B/E...I don’t fancy its chance as I see price heading towards 5300 zone but just incase we do head up from here and start gunning for 1.60. I expect large orders to start being fed into the market around here which is evident from the way we have spiked up of the expected minute’s data. This does open a excellent discount selling opportunity for those wanting to push price towards 5300 so I would still tread cautiously until the daily gives us some reversal signals.

Last Friday’s COT data showed the institutions were Net Short marginally on sterling when the retail traders were net long. That made it highly probable we would test 5470 area which is what we have almost done this morning. Will be interesting to see if the institutions have gone Net long in the next COT report bearing in mind the data released is from the previous Tuesday.

Stocky

4 hour GU chart.

Stocky

Well, almost back to that whole 1 pip profit, after returning - went to the gym to take my mind/trigger finger off the news - to see that the 150-ish pips accumulated in profit the last two days was taken back.

I set my stall out on Monday, and so will stay with the same display, Until PA breaks north of descending 4hr Guppy profile, and said profile begins a new twist.

COT report - hmm, taken my eye off that the past few months... must start reading it again.

Bearish engulfing weekly bar off 1.6 confirms resumption of downtrend:



Expecting a bounce off 1.56 to retest 1.5750. If it doesn't then expect strong fall to 1.54, bouncing there and then further falls:

Follow up on aussie dollar trade. Price has pulled back to 0.9001 and held. Have not entered yet but will wait for price to break above pivot.

Stocky

Yeah, been thinking about that. It's a shame the 38.2 FE appears to be in the way of a nice drop - well, that and other regions of support... fans, fibs, MAs, zones etc. It becomes a little mind-boggling sometimes.

Do you think .9000 has been violated too much recently to form support? I'm looking at the weekly bearish bar and only liking shorts on this pair for now.

1.5322? Yes - and all those too. But for me the bar overwhelms it all and I'm looking at days/weeks. Dow futures I have an eye on, too.

Sinner is no fool:
But he should try to get more sleep...

Hi mike,

I agree on a weekly basis 0.9000 has been violated a few time but nothing excessive to discount it as support. A you are aware we are making HH's and HL's on most longer and shorter term timeframesfor this pair. It just depends on how you are trading this pair. On a longer term weekly basis a pullback to 87.90 is a better long entry but my basis for entering around 0.9000 is... firstly that is where I exited yesterdays long from 8864 because I considered it as valid resistance. Secondly on a intraday basis we are making a nice sucession of HH's and HL's shown on the hourly. With yesterdays market profile forming a very strong POC at .9022 it increases the odds on a bounce around here. Should we break below .9000 and break the HL's formation then its a small stop that will be hit. Nothing major. If it holds then the target will be previous HH which is 80pips away making it a decent RR trade.

As you know I dont trade this pair often but I hope that explains my reasoning behind the suggested entry. Sorry if thats an excessive reply to your Q but im literally sitting on my hands as im in all the trades I need to be in for the day. lol

tradewell

Stocky

Some charts to accompany previous comments.

Hmm, Soros reduces equity exposure by some 42%. Concentrates on gold and commodities. I will be interested to see what the Renminbi and Aus do alongside gold – this is where the stuff is produced and owned these days, and all are calling for the fall of fiat currency. Well, not quite, but working on a little ditti that covers - as another commentator suggested – the very recent statement by Soros that gold was overvalued, stagflation and Economic Confidence Models, and the nonsense of European growth as the recent figures that only reflect German growth; thus dragging the Euro up slightly.

Might even have a bash at the UK, and the consequences come the 20% VAT rate come 2011.

Anyway, tired here, and eyes glazing over after watching the locals walking around dressed as video game combatants – not without its merits, I might add.

The 4 hour EUR/USD chart shows that price is stuck in a wedge, hinting that price might be ready to break below the yellow trend line. I’m planning to short the top of this wedge using but will us a limited risk position as price is still in a clear uptrend.

Hi Stocky, I knew it, finally you would slip and we would discover why you are always in front of all the best bids, seem to offer at the nice prices, come on man, you can tell us, which of these 3 big names you are working for:

(from forexlive)
http://imgs.sfgate.com/c/pictures/20...0501678372.jpg

Hehehe! Thanks for your concern mate, I did take last night off the desk and spent it watching bad tv, a little work quantifying some Ichimoku things and sleeping.

Anyone who reads my posts (is there anyone?) will remember my concern at the decoupling of the Dow and cable, as well as the decoupling of the Dow Jones Industrial Average and most xxx/USD and xxx/YEN pairs. I'm posting a chart again of the weekly DJI versus cable and it's interesting to note the bearish weekly bar popping up (I should say popping down) on the Dow - as well as cable, fiber and the aussie. I take this as a very bearish signal for the Dow, primarily.

The Dow posted a lower low last month and last week posted a lower high which will be the high for this month, in my opinion, given the bearish week which followed. That's the key. We have to break that high. If we don't we'll see an equity sell off for some time to come, coupled with dollar and yen (relative) strength.



If we look at the monthly version of the above chart we can see that the last time this decoupling took place was 2000 - 2002 when the DJI dropped from 11,000 to 8,000.

My gut feeling is that we are at an interesting point regarding equities, and with Mr. Soros turning his back on them, I think the seasonal drop for September/October is fast approaching, and given the current climate, may be a little deeper than most would like.

Currency wise, I favour a push up on the dollar, but who knows these days.

Anyway, back to the fundies for a few hours - feel the need to take a few pops at people.

Hi Sinner,

lol.....So you finally worked it out..bugger lol...im the one without the Barclay Capital jacket in the pic...jacket dosent match the tie so decided to leave it at home..haha I wish!!!!

Looks like them big players are still hanging around the 1.55 zone....Massive orders fed in of the Retail figures....All strong signs we are going to take a direction change north soon....1.55 seems to be well gaurded so im happy to let the big guns defend my order along with theres..

Stocky

So, Eurostat shows the GDP across EuroLand expanded by 1% in the second quarter of this year, and by 1.7% when compared to 2009. Good news to those that like to remind the public of how good they are at producing policy that will save us from oblivion… I’m not sure of the fudge factors and adjustment criteria that are implemented in order to reach this figure, but let’s roll with it.

Well, if they were more objective in their appraisal of current climates, they would, of course, have noted that the saviour of the EuroLand statistics at present is German efficiency – some 90% of all EU trade surplus can be accounted for through German trade - coupled with frozen wages, higher taxes, and less spending on social projects as the German Government collect the pennies to put into the coffer over in Brussels. German economic expansion sits at some 2.2% for April to June. This contrasts, somewhat, with the 0.6% for France, 0.4% for Italy, 0.2% for Spain and Portugal, and 1.5% contraction in Greece. It is at this point that I heed that respected economists indicate that a fall in industrial production was recorded in June throughout EuroLand. 0.5% in Germany – I believe the smallest fall of the countries involved in this essay. On a statistical implication, this would imply that a far greater contraction of individual member states’ economies will occur, further compounding the laggard problems within EuroLand.

Speaking of dilatory issues, Christine Lagarde is hailing the last quarter's figure for France in her usual manner – irritating corporate euphemism that just irks everyone. “I hope we’re entering a virtuous circle”, said she who, one fears, cannot discern if she inhabits the vaporous, or veritable world. Well, Chrissy, baby, I’ll bet the 1.6% fall in industrial production in the second quarter ain’t gonna help much, and I’ll tell you now, as one who enjoys the French lifestyle, the country isn’t exactly brimming with biblical divinity – know what I mean? - although I venture to say that a lot more people are praying for redemption now that you are trying to mount your hill to preach– and it isn’t due to your proclamations, but to get away from them.

Wilhelm Nölling, one of four German professors that recently lodge a constitutional complaint against the German Parliament's passing of a fiscal rescue package for the Euro, and critical of Berlin for crying for solidarity with Europe, while failing to show such solidarity with those that voted the current government to power, gives a bleak view of where the Euro is heading whilst Germany funds its existence. Noting the money leaving Germany, Nölling‘s comment upon this capital redirection was: "In violation of all laws, we are being forced to rescue a currency that cannot be saved." Bleak words from a man who, along with the three other professors, was ridiculed and made an outcaste in 1998 for attempting to stop the formation of the Euro; reasons, amongst others, included the inherent problems of not being able to remain stable owing to the disparate economies of the proposed union, and poor control mechanisms that were planned. The repercussions, they argued, would be a threat to German fiscal stability and living standards for its citizens. Looks like they were correct, and, they argued, any monetary union could not be enforced until a political union was forged. Well, we have all seen how well this forging of the EuroLand composite has been.

It remains to be seen how much more of a mess is to made, but Eurostat have noted the insidious rise of inflation within EuroLand, up 1.7% in July against the 1.4% rise in June, and the largest rise since November 2008. Add to this the 2.1% July rise in EuroLand retail prices – I’m assuming on goods such as fuel, alcohol etcetera (the stuff that keeps a lot of us moving) – as opposed to the 1.9% rise in June, and things are looking down. VAT increases helped in the rise in prices, but it is fast becoming very expensive to live and work, and austerity cuts are only just beginning to be introduced to some nations. France has yet to set the ball rolling, so it should be fun when they eventually do, and they will have to.

As has been previously commented upon, those nations that EuroLand rely on for export – principally China – are suffering contraction. So, if Germany can’t export there, it will not import materials from EuroLand, and thus member states will be in trouble… particularly, I think, France, whose main trading partner within the union is Germany.

Wilhelm Hankel, one of the four German professors, pretty much sums up sentiment in EuroLand when stating that the efforts to revive the Euro are somewhat akin to someone trying to, "get a living corpse to walk." I agree, and so the man on the street will be left to rot in the gutter, as the apparent good Samaritan – the politicians and bankers – whilst trying to appear humanitarian as they stand over us and offer advice to get back up, are emptying our pockets at the same time.

Production decline leads to economic decline; leads to living standard decline; leads to societal decline.

Thank you very much, governments and bankers.

EJ daily flag pattern has beeen forming since monday.

109.15/ 109.50 proving solid support and has just rejected the spike down from the 1.30 US Jobless figures. This wedge has to break one way or the other sooner or later. How many tests can this support withstand??? Lets see if the Philly Fed figures can help us through. A break below 109.15 opens up 107.00 as next target.

Stocky

Well, back to that whole pip profit again.

If I couldn't at the PA, I'd be at the