EURUSD

Your defense isn't to disprove my theory but to learn 'how to value currency'?

with that, I am done with ya ... unless you actually give more then a conspiracy opinion.

& to answer your question, UTSA, but if you run a business and it cost you 10-20% more to buy the same products as a year before, you can afford less and charge more ... either way causing ... are you ready?? but causing 'INFLATION', therefor people can't afford as much "hence buying goods from overseas" & thus overvaluing the currency as the economy will shrink since the business's and country are making less.

But thanks for disproving instead of just critiquing with no other defense ... or wait ...

mike! mike !

Thanks , here it is , roughly & not going ew counts so minutely though .
fontu

What business school did you go to?lol. Law of one price does not work in the world. What you just post is not a valuation model. Dude go back and do some research and learn how to value currencies. Let me help you with a model. Try using this model and you will know that the Euro is not over-valued.

The model values currencies relative to each other in direct proportion to the foreign holdings of each, that is, XAB= FA/FB, where FA= Quantity of A’s money owned without en-cumbrance by foreigners and FB= Quantity of B’s money owned without en-cumbrance by foreigners.XAB= Currency value of Nation A’s currency with respect to Nation B’s. I hope you are able to input the figures.


http://cdn.forexfactory.com/images/m...ading_dark.gif http://cdn.forexfactory.com/images/buttons/edit.gif

lol, so you had to do a duplicate post and google 'how to value currency' real quick which shows you didn't even know what you are talking about ... HOORAY WIKI!

done with ya

I agree with your views and I had posted this earlier on Saturday as to what most likely happened in the first 15 days of January 2011 from a fundamental and supply and demand point of view. Having a clear picture of what happened even after the fact gives you as a trader an edge into the future.

Here was part of my Saturday post.

My knowledge of what happened during the 15 days of January 2011.

This knowledge gives me an edge in knowing what might happen in the future. I use the word might since things can change daily in forex.

EXAMPLE: China and USA meet this week on Presidential Level.

Just before the holidays in late December there was very little liqudity and EUR/USD had a nice run going into the end of 2010.

Then the FOCUS was almost solely on Portugal and Spain while things seemed much better in the USA. Before the next shoe dropped in Europe the worst was assumed by the market and EUR/USD reversed by over 500 PIPS and as the last COT report on Friday proved there was an incredible increase in EUR/USD shorts.

Please keep in mind this report is only until Tuesday of each week. So starting on Wednesday and into Thursday as the fear of Portugal was removed. (China One Billion Private Placement) Spain Bond Sale was OK.
Trichet was HAWKISH on Thursday and then on Friday with BAD retail sales and Dow down the correlation between equity markets and EUR/USD was not there.

What was happening as next Friday's COT report will surely show was a MASSIVE SHORT COVERING in EUR/USD.

To ASSUME next week that EUR/USD will go up or down is to make a BIG mistake. The markets will tell you NOT THE CHARTS until after the facts such as the China meeting. The direction of the Dow. All of these NEW fundamentals will affect supply and demand and the readjustment of asset prices such as Gold which had a sell off will have an impact in the market.

The US Dollar is going down as is the Euro and it is just a question whose turn is it to go down that week.

Here is a great video that everyone here should watch that explains fundamentals better than I ever could. Comments welcome.

http://broadcast.ino.com/education/t...eboard_6/?blog

how's u weekend

Google what? U are really funny. I'm a CFA charter-holder. I do not do what you guys do (Day trading or scalping). I'm just here to gain market sentiment. I just thought your post was lacking something so I had to add a comment. I'm sorry if you took it the other way. Anyway have a nice day.

wise words.

asi see we should go to 1.356and then we will fall down

One thing that I learned trading forex from a fundamental point of view is that there are many many different opinions and even different research material and in many cases from so called experts in the industry. My method is to read as many as I can from both sides of the coin and then form my own consensus.

The following outlook with link attached is what I consider excellent research and you can only gain by taking the time to read it and understand.

I had also posted this on Saturday on this thread.

Issues 2011:

The unfolding historic Bubble backdrop is the overarching Issue for 2011. This is a “Bubble year.” Yes, the prognosis has remained the same since I wrote “Issues 2010.” There are, however, important distinctions, developments and evolutions from a year ago.

A 12-month period of robust Bubble Dynamics has elevated systemic risks – risks at home and risks to global financial and economic systems. A major worldwide inflation has impacted risk assets generally – if not evenly. One additional year of aggressive policymaking has further distorted market perceptions – in particular how markets perceive liquidity and Credit risks. “Exit strategies” lost their credibility last year, while those acting on faith in the global central banking liquidity “backstop bid” have been rewarded – and emboldened.

To be sure, the dramatic rise in bullish optimism has engendered susceptibility to disappointment – and perhaps even disillusionment. Yet Bubbles do have that perverse way of persevering long enough to ensure that virtually everyone has had the opportunity to climb aboard.

Having survived the Greek crisis and contagion scare, the global government finance Bubble soldiered right through 2010. This allowed – the markets accommodated – another year of our federal and municipal governments adding significantly to their debt loads. It was one more year where the maladjusted U.S. economy ran a Current Account Deficit approaching $500bn. It was a year where the Fed’s bloated balance sheet added another $200bn, while global central bank international reserve holdings expanded an unfathomable $1.6 TN.

The past year saw another $500 billion flee the U.S. money fund complex in search of higher yields. Tens of billions flooded into perceived low-risk bond and muni funds, while tens of billions more headed overseas. Meanwhile, money flowed into the hedge fund community, where assets and leverage are said to now approach pre-crisis levels. All of this amplifies systemic risk.
Stock market risk has grown steadily over the past year. Capping an extraordinary two-year period, the broader market again dramatically outperformed the S&P500. Especially during 2010’s fourth quarter, a highly speculative market turned dangerously speculative. Many of the more suspect stocks continue their period of outperformance. And, despite the overhang of serious economic issues, the broader U.S. stock market now approaches record levels (S&P400 Mid Cap index at new record high).

The market commences 2011 with many of the market’s favored stocks/sectors at wildly bullish levels of valuation and expectations. Overall market sentiment has moved to extreme bullishness. In Bubble Dynamic fashion, equity fund flows have turned strongly positive subsequent to a historic market rally. Equities today are winning by default within a backdrop of near-zero short rates, rising bond yields and municipal bond angst. Throughout the marketplace, prices have become increasingly detached from underlying fundamentals.

Rising global yields is a key Issue 2011. Fixation on deflation risk has given way to the reality that the world faces significant inflation, Credit and, inevitably, liquidity risks. Mounting inflationary pressures were given a major push when the Fed back peddled from an “exit strategy” and moved forward with “QE2”. Subsequent to the initial euphoria, markets now appreciate the heightened risks associated with additional quantitative easing. And as global yields move higher – and deficits mount - risk premiums must adjust further in order to discount the possibility of destabilizing market revulsion to any number of profligate borrowers. It is a major Issue 2011 that central bankers at home and abroad may confront tough decisions as to whether to implement additional market liquidity support into a backdrop of rising long-term bond yields and waning market confidence.

In the case of Europe, market “success” in disciplining politicians has initiated the problematic downside of the Credit cycle. The transition to “austerity” and policy restraint is, as it always has been, challenging, painful and destabilizing. Economic and social upheaval is not conducive to market confidence. Yet, at the same time, fiscal prudence and economic adjustment are fundamental to a more stable economic future. It’s not pretty, but at least Europe has commenced the process.

In the case of the U.S., the markets’ accommodation of fiscal and monetary profligacy creates some short-term benefits along with major intermediate-term risks. Somewhat amazingly, our policymakers still enjoy great flexibility to inflate government/system Credit. This, for now, supports bullish fundamental prospects. The $4.0 TN increase in federal government liabilities over the past 27 months has inflated incomes, corporate revenues and securities markets, while stabilizing real estate prices. At this dangerous stage of the Credit Bubble, so-called economic “fundamentals” will tend to support bullish optimism and elevated stock prices. Strong corporate earnings and accelerating GDP growth will be viewed as confirmation of the bullish thesis, while they are in reality consequences of the unprecedented expansion of governmental control over the Credit system and economy.

It is a major Issue 2011 that U.S. federal government debt will for the third straight year account for all – or at least the vast majority – of total system Credit creation. I would argue (confidently) that this dynamic is dysfunctional. U.S. government debt is being mispriced, over-issued, and misdirected – ensuring only deeper economic maladjustment and financial vulnerability. Tough decisions and tough economic adjustments are only being postponed.

It is a fundamental issue that total system Credit creation is originating from chiefly non-productive marketable debt of the – not especially efficient or productive – governmental sector. It is an Issue 2011 that our recovery is entirely dependent upon a favorable global macro and market backdrop necessary to ensure the ongoing massive issuance of increasingly Credit-challenged U.S. government debt obligations.

It is the (“moneyness”) nature of government obligations that they enjoy special treatment in the marketplace: confidence tends to be sustained during longer periods of over-issuance than for private-sector Credit instruments. And whether it is Greece, Portugal or the United States, fundamentals may very well appear encouraging so long as the marketplace accommodates uninterrupted borrowing excess. But, make no mistake, underlying Minskian “Ponzi Finance” dynamics ensure a problematic day of reckoning when the market inevitably cools to the debt explosion. Importantly, the longer the markets accommodate a government Ponzi debt scheme the greater the inevitable dislocation – the greater the tumult when the financial and economic systems are forced to operate with reduced government debt expansion. The costs associated with a crisis of confidence in government debt – the foundation of contemporary “money” systems – are enormous.

For 2011, the bulls take comfort that, in spite of all the talk and elections and such, Washington has no intention of adjusting its borrowing and spending habits. At the same time, it is becoming increasingly challenging for the marketplace to disregard a troubling debt growth trajectory. Two years ago the bulls could argue that U.S. government debt ratios were ok and that massive borrowing was a short-term phenomenon. Neither has credibility today.

The possibility for a surprising jump in Treasury bond yields is a major Issue 2011. On the one hand, Treasury is not interest-rate sensitive; the marketplace doesn’t have to fear much of an issuance impact from a moderate rise in borrowing costs. On the other hand, this dynamic would imply that yields are poised to surprise on the upside when the markets eventually force borrowing restraint. It doesn’t take a wild imagination to envisage a market problem leading to an economic problem, to additional “TARP,” more bailouts and a jump in borrowing costs – all combining for a dramatic deterioration in our nation’s debt position.

That borrowing restraint is being imposed upon U.S. muni finance is a major Issue 2011. The year has commenced with municipal bond yields adding to Q4’s surprising jump. Today, state and local finance is our Credit system’s weak link. What began in (“subprime”) Greece has made its way to Illinois, California, New York, New Jersey, Florida and elsewhere. Throughout the country, governments will now be forced into the messy proposition of getting their books in order. After ignoring this issue for too long, a global marketplace keen to structural debt issues has commenced the disciplining process.

The dilemma now facing U.S. muni finance has been significantly compounded by policymaking and market dynamics. For two years, loose fiscal and monetary policies allowed governments of all dimensions to paper over structural problems. Washington largess postponed needed austerity measures, while zero rates incited a stampede into seemingly attractive state and local debt instruments. The proliferation of Build America bonds and ETF products, in particular, were critical for enticing atypically large speculative flows into the sector.

Now, with the Bubble having burst, municipal borrowers confront the challenge of large borrowing needs in the face of steady financial flows exiting the sector. Moreover, this poor liquidity backdrop could be further compounded by bearish speculative bets against muni bonds. There is a real downside to the proliferation of seemingly liquid instruments that allow participation in the upside of a sector: they foment acute risk of illiquidity and dislocation to any unexpected reversal fortune.

2010 witnessed the “flash crash.” This is potentially a huge Issue for 2011. Throughout the markets, there has been a proliferation of instruments – especially exchanged-traded funds – that seemingly offer liquid ways of speculating on a vast array of risk assets and market outcomes. Many players have been drawn to these products because they offer a much more attractive liquidity profile than what is available for the underlying stocks, debt instruments, or commodities. Others have taken a more aggressive stance when playing a particular sector or theme specifically because of the capability of rapidly hedging various risks in the liquid ETF and derivatives marketplaces. And I would expect that many of the more sophisticated players have one eye on the exit – and both eyes on what instruments they might use to protect themselves – when they see the Bubble beginning to burst.

The explosion of trading in these instruments has significantly altered risk perceptions and risk taking. Especially because of today’s Bubble backdrop, I believe risk to any number of market liquidity issues has created major systemic vulnerabilities. The concept of “portfolio insurance” has evolved mightily since 1987.

2011 is extraordinary for the degree and variety of risks that confront market participants when compared to the extent speculation and bullishness has become ingrained throughout the marketplace. The ongoing evolution of the European debt crisis creates great uncertainty. There are big unknowns when it comes to issues surrounding the mounting inflationary pressures throughout China and “developing” Asia. The year begins with “developing” economy Credit systems in overdrive, fueled by loose Credit, robust inflationary forces and unrelenting “hot money” inflows. Such Monetary Instability foments myriad market, economic and policy risks.

In particular, China faces very challenging Bubble dynamics. The Credit and inflation backdrop beckons for “slamming on the brakes” – or at least tapping them. There will be none of that. Following in the footsteps of others, Chinese authorities failed to act with sufficient force to quash Bubble and inflationary forces early enough in the cycle. Bubble risks have grown exponentially, and I would expect policymakers to continue to tread softly. The Chinese juggernaut Credit system and economy has become a force to be reckoned with.

If, as I have to presume at this point, the Chinese Credit Bubble is sustained through 2011, Asian economies will become an even greater glutton of global resources and commodities. Policymakers are grappling these days with how to contain the inflationary effects of massive “hot money” inflows and an increasingly complex Credit backdrop that goes way beyond monitoring bank lending and setting loan quotas. And while focus on consumer and real estate inflation garners the most media attention, the Chinese plan to continue stimulating consumption and lower-end housing construction.

China's policy endeavors – is poised to walk the highwire - to manage inflation, while boosting incomes for the hundreds of millions of lower-end and rural workers that have lost major headway against the urban and rising middle and upper classes. To say the Chinese face an extremely challenging task in controlling a runaway Credit Bubble and historic economic transformation is an understatement.

Here at home, policymaking has turned simple: run massive deficits, keep rates at zero, and have the Fed monetize debt until the private sector can be trusted to do the heavy lifting. Well, don’t hold your breath. So, for Issues 2011, we can assume the Fed stands pat on rates. And while they have little credibility, both Congress and the Fed are talking tough against bailing out troubled states. Whether they can stick to this rhetoric is an Issue 2011. The dollar continues to benefit from the capacity of our policymakers to inflate Credit, a dynamic that will compound our dilemma when the markets turn their sights on disciplining Washington.

I’ll posit that each year of massive government marketable debt issuance reduces the likelihood that central bankers will be able to exit their market liquidity backstop operations. History has shown how systems become precariously addicted to inflationary measures and market interventions. The Fed’s balance sheet will only move in one direction. And when push comes to shove, they may be forced to buy municipal debt or monetize more Treasurys to help finance bailouts. For now, the most important Issue 2011 is that serious structural deficiencies ensure that the Federal Reserve errs on the side of liquidity creation. This would seem to ensure a year of even greater Monetary Disorder, with the risk of heightened instability throughout global fixed-income, currency, commodities and equities markets.


LINK:

http://www.prudentbear.com/index.php...w?art_id=10492
__________________

I just saw your post now after posting a link to Prudent Bear Outlook 2011

What are your thoughts on their Outlook.

ALL of your post are lacking everything but simple thoughts ... your only defense was to criticize & judge, and then when you finally posted a simple formula ... that doesn't justify anything.

"what business school did you go to" ... your narrow-minded quick judgement surely shows your success, to add ... you are a "CFA charter-holder" and you come to FF to get market sentiment??

lol, /done /ignore

I think every currency is a rubber band eventually coming back to point 0.0 which would be null ...

Every action there is an equal and opposite reaction ... one goes up & the other goes down, exact opposing reactions ... it isn't hard to understanding if you are willing to let the 'null' signal takes years to return to the median price.

My best example of my opinion,

China has been doing yearly pay raises of about 15% & the U.S. has been doing 0%. The Chinese are starting to learn the theory of workers rights & strikes, etc.

It is becoming more expensive to develop goods there, so much they are going to more & more mainland to create factories & such ... there could be a point in time to where it is cheaper to produce within the U.S. {using the States as an example} ...

This could happen in 10, 20, 30 years ... but the way it is going, it is sure to happen as the gap between wages might be wide, but statistically speaking, it is closing .. and there are no suggestions to cut wages in china & raise wages in the U.S.

And so is modern art, but that does not mean that price will come down soon.

Even if PPP is of some value for assessing the valuation of currency pairs, it does not mean that price will soon follow. What is the meaning of overvaluation really when the situation can be sustained for 10 years in a row?

looking at the image ... /tinfoil hat

but instead of spending all weekend with family and having fun, I sat here thinking about how I could impress the 90% of 10v+ members ... such as Cloggie & GulfCoastPips ...

Can't wait to see the post-candlestick calls & 5 minute forecast! /hooray 6th ban.

Joking aside {or not} Another good day in the Great State of Texas ... how was yours and everyone else's?

Anyone in Germany? Wife & I take a trip every year and this year we are taking part of May and most of June off to travel Europe & starting in Germany at Rammstein AFB ... anything special going on this year?

well to tell u the truth i dont give a dam where the market will be in a week or a month i take it hour by hour , now i do agree that market is fudamentals and technicals , ist 50-50 70-30 or 30-70 who cares , to me the market have an average of 200pips a day i do enjoy the range an d hit between the lines , a news might take the maeket up or down but it comes back where it was, history and chart dont lie,its a game lets stay a head of it,

thanks for the info best of luck lets make it a green week

Hi,

I am wondering what will be for Monday movement and I would ask your opinion.

On daily chart was a ranging movement, and we are on the top of the range. But the Friday movement was to few to have a strong movement in this direction. And wasn't a retrenchment from the bottom.

At calendar isn't any news marked with red, so I am expecting a "normal" Monday movement: max 60 pip, but better 40 in one direction.

I think needed some news force to reach the 1.3600 which could happen on Tuesday, but maybe will test somebody very powerful the 1.35 and will meet some resistance there.

When isn't clean for me UP or Down I am playing with very few risk or I will stay away. But I would bet on short, because wasn't retrenchment and "needed" for a healthful market. I would risk 0.1% max on that

What opinion has others for Monday direction?

take a look at previous 50 posts

i will sell the rally next week and the week after.

I keep seeing posts about 10V vouchers and senior members and some class status attached to these vouchers and I wonder what that is all about.

Does that mean that if I P O one of the 10V senior members they can suspend me. Seems like an interesting system considering all the different personalities I see posting here.