GU, GJ and EU Analysis Thread

If you need a friend, get a dog.

I wish I had the comportment to say that when I'm at work.

Hiya

My 'observations' tend to be replaced by 'questions' pretty frequently, as I now accept I'm not the 'all knowing Forex Godess' I thought I was when I first started trading! I'm notsure about anything really, i.e. initial strength, then weakness, or weakness then strength; each weekend brings a new round of questions to mind, which kindof help me plan my trades for the week ahead.

On Cable, we didn't quite get up to 1.6106, but close enough to put a smile on my face with the few trades I took last week. One thought though. At the rate we were going yesterday evening after London closed, I thought they'd take us up to 1.6069 at least, but they didn't. Sooooo, I'll be 'watching' that 1.6040 and 1.6069 area for any signs of resistance tomorrow night that may indicate we're going down first, rather than continuing up to test October's high first.

And what happened to that poxy Euro? I spent a while watching it yesterday evening, since you folks alerted me to the pair. Waited for a clear break of 1.39, which didn't happen till the last hour of trading (after I'd turned off my PC), producing a bullish daily candle, plus a weekly doji once again (might not mean anything though as they may have just done this to get a better position to short from, come tomorrow night).

If the US go and announce a 'worse than expected' QE program this week with no equally bad news from the Eurozone, then I'd be looking to at least 1.4150 before taking a long-term short position.

Looking across a few monthly charts this morning of major pairs against the pound, the only pair indicating pound weakness is the Geppy, all the others suggest otherwise (doesn't mean we won't dip, but can't quite see 1.5500 this month afterall though I could be very wrong of course). Against the Euro, the main pairs suggesting Euro weakness are the Euro/GBP and Eur/JPY , all the others suggest a strenghtening of the Euro (again, nothing to say we can't see 1.36 again this month, but 1.33 seems remote, bar some major bad news).

We all know what's up with the JPY and I'm just waiting till the Japanese decide they've proven their might enough, and choose to do something about their strenghtening currency. I've had buy limit orders waiting on the USD/JPY and Geppy at 75.80 and 116.80 for months now, just in case they take the pairs that low, but never trade these pairs normally so if these never get filled, so be it.

This whole piece might not mean a thing and, indeed could be read as mere speculation, but just some thoughts being expressed out loud.

Good luck to you all this month!

i

Yes, a lot to consider for Sterling. The FTSE dropped last week as US QEII looms large, and saw Cable pop up. Everyone expects UK inflation to rise, and with that, the BoE have said interest rates would have to rise in order to combat this. Good for traders bullish on Cable, terrible news for many others. Rate rise is expected sometime in the middle of next year, but who knows. And will they, or won’t they; that is the question regarding QEII in the UK… the recent spate of good news is being used as argument not to initiate QEII in the UK.

We then have the current fall out in Europe – may throw some comment upon that later – which has seen EG fall. I expect because of favourable reception of the UK’s recent budget review when set against the latest sovereign debt discussions that are taking place around Europe. We also have local elections in Greece next week, which the incumbent government say could precipitate national elections if it is clear that there is no support for the ruling party, through ‘unfavourable’ results. I refuse to believe that these people do not look out of their windows, and so expect a certain local result. In addition to all of this, we have seen the manoeuvrings this week by the big players within EuroLand, and the resulting jump in bond price, and fear within the bond market to purchase from Europe.

A quick look at various instruments, for me, shows consolidation and placement by big money, in preparation for the next few weeks. I expect it to be choppy…

Anyone read of how a member of the public was locked up for two days after sending an e-mail from his home to Rachida Dati? Erm… asking for an inflation. Tut, tut…

http://www.telegraph.co.uk/news/worl...inflation.html

The imposition upon civil rights could be argued all day here regarding this incarceration - as it could when concerning anything associated with the EU these days. However, it brings into question any overtures that I may make towards Christine Lagarde. For regular readers of my drivel, I am now concerned that I, too, may find myself leaving the soap on the shower floor if incarcerated, prior to deportation back to the UK. Younger readers please close your eyes now – hey, Chrissy, you know I have a thing for you – demeanour and physical, not your economics or corporate-piffle speech – how about we get together and see if we can discuss my issue of inflation with you… bring racy Rachida if you want in a moral support/ménage à trois sort of way. I’m a little younger than you both, but feel that I could hold my own when faced with you two.

Okay young 'uns', you can open your eyes again, the 'probable' Halloween nightmare for you has passed.

Regarding the UK; Cam, my man, you’ve blown it pal. I saw the picture of you and Angie in Brussels, you know, the one where you’re taking your coat off in a ‘I mean business today, let’s do it’ fashion. Pff, given what you got from the table, I’d say it was more a sheep taking off a wolf’s coat. Only a 2.9 percent increase in the EU budget – mate, you want to listen to other delegates present, as I think that you will find that the UK will be subject to more. But then again, I think your not that stupid, and know it will be more. And so we see yet another of your pre-election promises broken. I can’t say I’m surprised, as it has been too many generations since any politician with gumption and integrity represented the voters. I reiterate, lest you forget where I stand: the UK is a fascist regime masked in a counterfeit democracy. Still, at least I can still say that, so some dissent is still permitted. Readers, if you read nothing more from me, you know the UK is employing the same surveillance techniques as those employed by racy Rachida, and they have found me through this IP address.

Oh, and nice to see that the rules in EuroLand can be ‘adapted’ apparently. Surely a change to a treaty – even if ratified by everyone (by this, I mean the public), which it was not, and which in those cases where it was allowed to be rejected, was put to the same public again with promised changes before it was accepted, or in other cases, rammed through anyway – requires another round of ratification? Of course it does, but those that run it, know that if put to the vote by those really affected by it, would be comprehensively rejected.

And then we have Germany and France collaborating – yep, a charged verb to use when discussing these two countries, but hey, it ain’t the first time they have done so. Opps… almost said too much:

http://www.economist.com/blogs/charl...governing_euro

Of course, what happens next week in the US, and the reaction by the bond markets to Germany’s success in implementing a Crisis Resolution Mechanism, will determine future direction for the Euro. However, I want to see what Herman Van Rompuy – if readers do not know, this is the man I least trust within EuroLand – comes up with… assuming he is not concerning himself with the budgeting for next year’s EU conference for homosexual, bisexual, transgender and intersex activists.

http://www.telegraph.co.uk/news/worl...onference.html

I was taking at look and gold and commodities over the past few days, and, in addition to everything else mentioned, digested the - surprise, surprise – surprise in US growth. I then went over to Zero Hedge, link at the bottom, and ultimately found myself looking at AU. Again, one can see consolidation/awaiting of next week in order to see if big money likes the Dollar, or something else. The USINDX is confusing, but gold, as I keep saying, is on a gradual rise… even if manipulated by the FED and the Chinese.

I still say 1500 for Gold come year end, and Euro V2 on 01.01.11.

http://www.zerohedge.com/article/fed...ops+to+zero%29

In my haste, I overlooked the ascending magenta TL on the 4hr. Pff...

Thanks goes to MarcVUM here:

http://www.forexfactory.com/showpost...postcount=9212

45Condor, great posts, as usual.

The sequel is a total disappointment of nothingness. First, the trade is nothing, and not even a proper trade. Second, it is really of nothing.

Nonetheless, Douglas is excellent. He is perhaps the only one that carries the film along. I bet Oliver Stone would find that this one would be like the first movie, instead of warning off any excess on the Street, it would encourage people to flock to the Street to become the next Gekko.

For EU, my target is around 14550/60. It would be nice that if it could come down to 1.33 region for me to load up.

As for Aussie, it feels like total madness. EUR/AUD looks like there would be a trend change. I would not shred any tears if Aussie comes crashing down.

Keep up your writing. Always a good read

It passes the time, and I hope people have a bit of a laugh, or cry, depending on the context.

As for Wall Street... we'd better not tell Gammase1 that Mr. Douglas dies at the end of the film, it would spoil it for him as he has yet to see it.

Opps...

...the question is, how much longer will the wedge be respected?

Now that's not very sporting of you, old boy!

...just joking Sir.

Hope all is well.

45Condor wants to trade Cable, but the look of warning is telling him not to touch.

...thought I'd give all that frequent this site a little relief from the mounting tension prior to FOMC

If you're not in long already, there's no point going in just now following a 140 pip rise today so far, i.e. either wait for the retrace or wait till we peak then short cable (and PA today so far hasn't suggested we've peaked btw).


Grabbed a long at 1.5988 yesterday, with a view of 1.6160, but moved SL to break even last night following all the ups and downs of yesterday, plus this morning's brief drop;and now break even plus 50.

Thinking out loud now, we spent so long yesterday (and this morning) trying to break 1.604 I wonder if this has now become a support for cable, at least for the week? I'll continue to hold this long for now as there's no signs yet for me to close - though I'm not in a position to watch out for signs, as I'm enjoying a week off drifting in and out of sleep on the sofa.

One last point. Have we established the weekly low already yesterday (dare not suggest the monthly low). If so, then your 1.64 projection might be right round the corner, or else I'll get stopped out at 1.6038 and will be pretty peeved!

Back to sleep again.

i

QEII from the Fed on the same day that Greek and Irish bonds drop.

US elections, and also the Greeks this week.

UK QEII.

Timing of events similar to the last fear spike in the markets earlier in the year.

...I could go on, but we all read the editorial.

It is all coming down to how much is the FED going to indirectly pump into Europe via the banks, and will this be enough to continue the drop in the dollar.

The little issue of potential sabotage down at the LSE yesterday.

I smell a lot of something...

Woke up with a jolt to an alert on 1.6100. Having kept a sleepy eye on the swissy as well, the dollar doesn't seem to want to drop that much this afternoon .

Still holding on to my long order - by the skin of my teeth.

i

Following that FOMC spike, awaiting the MPC's decision tomorrow.

Good luck all for the rest of the week.

i

...hope tomorrow's NFP does not spoil projection outlined on charts.

From something discussed several months back. The blue band I labelled a comfort zone.

I am also watching the turn on the red MAs - similar to what occurred in 2005. Yes, lot of MONTHLY convergence, but large moves nevertheless.

PA currently poking at the ascending yellow 38.2 fib.

Could be an interesting run to year end.

EDIT: How about a kiss of the aqua MA at 1.6885? That would be nice...