Technical Analysis Fallacy

Dollar and Euro watch out below. Any combined movement below 81 and 110 will probably bring out the BOJ. Seems all moves south on the Dollar below the 81 level are being swallowed.

Most seem to think that the BOJ would like to head into the G20 meeting and weekend without firing a shot, market may try to test.

be careful and prepared.

regards,

hi katrooo, i'd appreciate it if you can explain it again with a recent example.
rgds/Kev

Good Morning Mike!

Thanx for your input.
Very appriciated.
Will have to dig a little deeper into the Options topic in its whole.

CU,
Niels

Just for info:

[...]In FX markets, EUR up vs USD in response to U.S. Treasury Secretary Geithner's letter to G-20 counterparts that contains comments such as "G-20 should not stop undervalued currencies from rising," suggesting U.S. wants to see weaker USD vs emerging units. Investors bought EUR as common currency expected to track emerging market currencies.
[...]
Contact us in Singapore. 65 64154 140; [email protected]

Disclaimer: Be aware of possible Cow Dung included ;-)

Just for info:

LONDON, Oct 22 (IFR) - EUR/USD recovered to a 1.3971 high in late Asia but semi-official names have once again stepped in to limit the topside and leave the price pivoting the 10-DMA line at 1.3932. Further 1.3900 and 1.4000 strikes intradayMore, which could hem in the action in the short-term, but it is the wider 1.3850/1.4050 range that is said to be directional into the weekend. [email protected]

Disclaimer: Be aware of possible Cow Dung included ;-)

BTW: EJ H1 is going to build a nice S-H-S formation ....
The intersting thing is, that EU is looking very similiar, means both pairs are running in sync for the past heurs/days ...

So I would have an eye on EJ today, to spot upcoming moves in the 3 KGDS ....

My action so far:

Decided to dance the shortside of EU this morning.
Entered scout @3934
Because of bad timing first rescue @3945
Now riding down with L2 to L3 attacks according to the momentum.
And based of confluence of the move with EJ

Edit: as always I have to check the behavior around that roung number (13900) in more detail.
Rebound - continuation - Who will know?
Only the lady :-)

Edit: It would be not suprising, if after the London Boys walked in and have tested the terrain to the south, the bias for my dance could change. But PA is king again ...

Good morning from me as well. Although there are almost no major news scheduled for today markets are lively and moving. We still have the G20 and we are in a POMO day so I'm gonna play it very cautiously today, especially with charts hinting a correction in the dollar value.

Rgrds
S

As I have mentioned yesterday: The news are very good opportunity to take advantage out of the vola.
Redúce size before the release.
Check PA after release and jump in.
I'm attacking eu still short side ...

Try to ponder, how strong the USD bulls are right, now, when thy are able to neutralise this Spike after good german ifo and press EU down again ...

And of course my inevitable TickChart ...
First EU
Second EJ, which shows the upcoming downmove much clearer/earlier, when looking to lower highs afer the news spike ...
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Yo Niels!

Short on GU n EU. No position on UJ for now just scout Long. Ok vol picking up again! time to dance.

UJ textbook move... broadening top @ 1min then check @15mins...ahhhh....

Good luck!
I'm out for lunch now.
Will be back for NY opening than ...

CU

thanks for reminding me, it's 1025 @ london already... momentum slowing. GG

Hi, just a short summary of last weeks action/news ....

[...]
gold is possibly in progress of a deep near term correction to 1300 and below and has been providing some support to dollar and yen.

The G20 meeting in Seoul over the weekend did end with some progress, if just a small step. Firstly, the G20 countries agreed to "move towards more market determined exchange rate systems" and "refrain from competitive devaluation of currencies." Secondly, advanced economies agreed to be "vigilant against excess volatility and disorderly movements in exchange rates" and such actions would "help mitigate the risk of excessive volatility in capital flows facing some emerging countries." Thirdly, members will "pursue the full range of policies conducive to reducing excessive imbalances and maintaining current account imbalances at sustainable levels". More importantly, there will be indicative guidelines to be agreed on current account balances to be rolled out at the meeting of G20 leaders in Seoul next month.
Dollar should have found a at least a near term bottom earlier this month after Bernanke's speech and such view was affirmed by last week's price actions. Recent Fedspeaks triggered speculation that Fed would probably implement QE II in a gradual, incremental way, at 100b per month, without a concrete end. This would be in contrast to markets' pricing of around 1T to 1.5% QE II. The readjustment was clearly felt in Gold's sharp correction from record high of 1388. There were some talk here and there that dollar would stage a more noticeable rebound after all is said and done and QE II is confirmed on November 3 after next Fed meeting. However, in situations like this, markets would probably start moving before market anticipated timing. So, beware of 78.36 resistance in dollar index and break of which will likely bring another strong rebound in near term.

At the release of the Spending Review, UK Chancellor of the Exchequer George Osborne outlined his plan to reduce the country's budget deficit by 156B pound. Debt interest payments will be lowered by 1B pound in 2010, then 1.8B pound in 2013 and 3B pound in 2014 - a total of around 5B pound by 2015. The BOE minutes unveiled that policymakers voted 7-1-1 in October to leave the Bank Rate unchanged at 0.5% and the asset buying program at 200B pounds. While the majority continued to support staying sidelined, Adam Posen preferred to maintain the policy rate at 0.5% and increase the size of the asset purchase program by +50B pound to a total of 250B pound while Andrew Sentance preferred an increase in Bank Rate of +25bps and to maintain the size of the asset purchase program at 200B pound. After all, there were increasing expectation that BoE would need to expand to QE program to support the economy in backdrop of spending cuts. Though, BoE might weight for the Quarterly Inflation Report before acting.
As expected, the BOC kept the overnight rate unchanged at 1% and revised lower growth forecasts for 2010 and 2011, saying 'the output gap is slightly larger and that the economy will return to full capacity by the end of 2012 rather than the beginning of that year'. Policymakers said that a weaker US outlook, moderate growth in emerging economies and slowdown in domestic economic outlook suggest further reduction in monetary policy stimulus would need to be 'carefully considered'.

To cool inflation, China unexpectedly hiked rates for the first time since 2007. One year deposit rate was hiked from 2.25% to 2.5% while lending rate was hiked from 5.31% to 5.56%. To prevent inflow of speculative money, it's believed that China would tighten up capital controls further. The rate hike would probably eased some pressure on yuan appreciate as it will take part of the job to cool inflation. Though, it's believed that China would continue to use both means. The move helped lift Japanese yen on risk aversion even though strength in yen faded a bit towards the end of the week.
[...]

Disclaimer: Be aware of possible Cow Dung included ;-)

Hey, and if you have to much time this sunday, here is classical read based on Wyckoff's famous views on PA ...
(Found it on EURUSD thread)

CU,
MaMood

Hi friends,

recent qoutes from dbFX for the 3 kgds:

EU 1.3969/74
UJ 81.31/33
GU 1.5678/80

So only EU has a little opening gap (also EJ, but that pair is most of the time in sync withEU for the last few days) ...

I wish you all a succesful start into this new trading week!

CU,
MaMood

Great - training, training and once again training.
A little piece of talent.
And of course training, training and once again training.
Very strong will and discipline
And of course training, training and once again training.
And a great teacher, trainer and coach in the background, who is showing you the way ....

Isn't it easy to become a master in what ever arts???

Cu,
MaMood

great read! thx.

Hi friends,

diisficult trading situation this London morning.
We have gone already in direction of USD weakness. Seems the markets see the result from G20 meeting as "no changes, so business as usual".

But how to enter the moves now?
Jumping on to the north directed train?
Waiting for a retrace as EU is approching a major resistance area?

All I can do now, is to be patient and watch PA closely to get a slight idea, what the ladies are planning to do ...
Maybe USDJPY is going to give us an idea ...
We are going deeper and deeper into the "pain area" of BoJ ...


Good fortune!

MaMood