EURUSD

I want to have further discussions on the options barriers and how they affect price when broken, or controlled.

Wasn't 3600 a pretty heavy options barrier?

Was the breaking of this what pushed price up another 25 pips on Friday? Or did it work against the up move?

before I run, have to be some place.
exactly. you see? for you both entries and exits are well defined. for me, only exits are.

shorts covering who were trying to defend the level under low liquidity conditions, would possibly account for a 20-30 pip overshoot...

hey, think i have your candle on my chart. was it a red or a green one?

I had 3625 from a daily Murray Level, and a resistance line from an old chart. We pierced 3624.6 with alpari, 3627.2 with oanda, 3623 with Broco and 3625 with Forex Ltd.

I will look now for a confirmed MSH, but that would require a single higher stab into that level... let's wait and see.

You all are having an interesting discussion here for the weekend.

The market is NOT random. It's a mixture of mob mentality, supply, demand, PA, emotion, and major manipulation. Utilizing TA/FA/PA and MM can give a trader the statistical edge to succeed, or at least a better chance.

for perhaps just a moment, is the valuation of the Euro that robust? The last time it got to this price, exaltations were gushing from every corner of the globe. What kind of good news are we getting today? Pronouncements that mean little in the long run of things--certainly nothing to warrant a 700 pip run.

I know that comparing the Euro to the US dollar is not much and I know the pissing match is more of whose worse that what valuation is better.

You may now resume your technical/fundamental debate.

Green party pulls out of Irish coalition. No bailout signed, "immediate" elections, let's see how the risk boys are going to like this one.

They are still trying to sign the bill in the next few days, forcing it through before the snap elections.

Watch the yields/spreads closely.

from FT:


Wobble over as European and US traders spy value

By Telis Demos in New York
Published: January 17 2011 04:46 | Last updated: January 21 2011 21:52
Friday 21:30 GMT. Traders have put the “risk” wobble of the past two days behind them, as a more sober assessment of growth prospects encourages selective buying. But there are still signs of lingering fears – of China and inflation – that are holding back gains.

The FTSE All-World index is up 0.4 per cent – held back by a soft performance out of Asia – while commodities are showing signs of stabilising after heavy selling led to stock and raw material benchmarks, such as copper, pulling back from cyclical and record highs respectively.


Stretched equity market technicals following the recent spurt, a couple of high-profile result disappointments and uncertainty about prospects for the Chinese economy had combined to deliver a sharp burst of profit-taking.

However, investors on Friday appear to spy value, and the S&P 500 in New York is up 0.2 per cent, helped by chipper results from General Electric. Industrial groups are leading gains, up 1.2 per cent.

The more stolid traders may recognise that pulses of concern about the speed of China’s growth and the monetary medicine required to cool it have been a regular feature of the market in recent months.

And while intermittently irksome, they have not been sufficient to halt a rally built on improving corporate earnings, better US economic data and still loose monetary policy among the major developed nations.

In addition, a major bugbear of the market, the eurozone debt crisis, is going through one of its quiet periods, with the euro up at 2-month highs and “peripheral” bond yields pulling back from their peaks. In fact, positioning by investors on the euro has flipped from short to long, from $7.4bn short to $788m long, according to CFTC figures. It was the second biggest shift on record, according to Scotia Capital.

However, the spectre of inflation still looks, with European nations raising alarms on prices of inputs that continue to rise. US traders sold technology groups in the session, like Google and Microsoft. Those groups would be hurt if businesses felt the squeeze of higher costs, both through commodities and higher wage demands, and cut their investments in new technology.

“This is when inflation has the potential to spiral and is in many ways a central bankers’ worst nightmare – interest rates have to rise to kill off this vicious cycle,” wrote Karen Ward, senior global economist at HSBC, to clients.

Europe – Bourses are recovering from the sharp sell-off of the past two sessions. London’s FTSE 100, which lost more than 3 per cent over that time, is up 1.2 per cent as miners come back into favour.

The FTSE Eurofirst 300 is up 1.5 per cent, helped by banks on reduced sovereign debt exposure worries, and cyclicals. A rise in the euro is being taken as a sign that anxiety about the currency bloc’s fiscal woes are easing.

Asia-Pacific –Shares were mainly lower on continuing concerns that Beijing may take further tightening measures to fight inflation and slow economic growth, in the wake of stronger-than-expected economic data.

The FTSE Asia-Pacific index was down 1.1 per cent, erasing its gains for the year. Concerns about more tightening intensified after a report in the state-run China Securities Journal raised the possibility that Beijing could increase interest rates again around the lunar new year holiday in February.

Most of the damage has been done by a 1.6 per cent fall in Japan’s Nikkei 225, where stocks linked to global growth and development, such as resource groups and Komatsu, the earthmoving machine maker, fell sharply.

South Korea’s Kospi index shed 1.7 per cent on foreign selling after recent sharp gains that took the Kospi to a record high this week. Australia’s S&P/ASX eased 0.6 per cent as Sydney traders reacted to Thursday’s) big falls in commodities on fears that China’s tightening policy may slow demand for raw materials.

Hong Kong is following the regional trend, dipping 0.5 per cent. But Shanghai rose 1.4 per cent on bargain-hunting after a 4 per cent fall over the first four sessions of the week took the benchmark to a 3-month low. Banks and property stocks, which had been hard hit of late, were in demand.

Forex – The euro is up 1.1 per cent at $1.3622, helped by the German confidence data and a spike in 2-year Bund yields to 1.30 per cent, the highest level in more than a year. This has pushed the spread with 2-year US rates to 67 basis points, the widest since January 2009, and is providing yield support to the single currency.

The dollar index is down 0.9 per cent at 78.12, and the yen is up 0.5 per cent to Y82.58 versus the buck. The Swiss franc and Norweigan krona are both up 1.1 per cent against the dollar.

Sterling is weak, following a poor reading for UK December retail sales. The pound is at 84.93p a euro, up 0.2 per cent. The pound is stronger against the dollar, however, up 0.7 per cent to $1.6001.

Rates – US yields are pulling back from the 2-week highs as inflation fears fade slightly and high rates attract buyers. An auction of inflation-linked bonds on Thursday did not go very well, pointing to a lack of concern about consumer price rises.

The US 10-year note is yielding 3.40 per cent, down 4 basis points. The 30-year bond is also attracting investors after worries about inflation pushed its yield in Thursday’s session above 4.61 per cent for the first time since April. The “long bond“ yield is down 1 basis point at 4.60 per cent.

German Bund 10-year yields are up 4 basis points to 3.20 per cent and spreads with eurozone “peripheral” debt are tightening.

Plugged into Doomberg on a Sunday afternoon Cloggs...

Always, I never switch of. Yields and spreads have been driving this pair for a year and that is not going to change, irrelevant of technicals or fundamentals, just trade the risk and you are on the right side of the market.

Look at last week, all equities in the EU down, equity risk of, spreads however were narrowing so Euro still went up.

Trade the risk, forget the rest.

Always keep up a risk chart, 10-yr T, 2-yr T, Bund vs Peripheral spread charts.

We are in a race between 2 ugly sisters for the invite to the ball. Buy whichever is the less uglier.

Euro play for the next few days? Watch the spreads and the new out of Ireland, if they get the bill through and the spreads don't widen, long euro, if they fail to get the bill through and the spreads widen, short euro.

I agree with you... that is usually why the dumb arses make money and the smart arses lose their money.

Hey...

I resemble that comment!

As long as they make money they don´t seem to be dumb - I wouldn´t care if I´m a arse then...

to put up with all this nonsense where valuations are based on how well countries are handling their debt load. That is amazing that something as crappy as debt austerity measures determine if a currency soars into the ionosphere.

Stupid is getting a pretty strong foothold here. The problem is: do you go with the flow (or gaggle) or not?

........and develop a method to do that. Retail forex is the only casino where odds are in punters' favor.

a lot is achievable if the odds are in your favour...

LOL! you bet.

But the issue is, you cannot win there. I know this, because my family owned one until late 70's, not in Vegas though.

Yeah, they gotcha nailed if you get caught counting, out of one - out of all...

Nothing to do with practices. Not all but many times, small bookmakers (like we were) are more afraid of losing than the gamblers, but ultimately punters' greed, fear and limited operating capacity rescues them.