EURUSD

If you ask me, the guys looking at daily or weekly should just buy a bigger screen

The best is actually 5M or 1M on a 24 inch... zoomed out and ready to go..

2 monitors already killing my eye . (23.4 ,20). big one then i need 10h sleep a day

25pips nice...still cheap if you thing its going to 1.60...

talk later, I'm off for a nap...

Its good, I can trade with whatever but I prefer a larger screen...

Cant wait too see reactions all over the markets tomorrow,

Later

the costumer support will have a lot of work this night

Hehe, I think thats the largest I have seen...

Should have some massive whipsaw so I am not playing it before I see something simple


Later Bra,

wise decision , i am thinking about login to my macro account instate of main or demo

damnit..what about cable i have positions..would i have been stopped out..was short

are u with oanda as well?

nope..that gonna make a difference?
u think oanda got an issue..the bastards

u think it is just a spike?..glitch

I am seeing some real weird and wacky fundamental views here in the last few days on this thread.

So let me throw mine in the mix, up to you guys to do with it what you want.

Downgrade

SnP gave ample warning about the downgrade and I covered this shortly after the debt ceiling issue was covered, they wanted to see 4 Trn in cuts and did not get it. We can all discuss the validity here of SnP's actions, very few here complained when they downgraded Ireland, Spain, Portugal, Greece. The downgrade was in the pipeline, I had anticipated it taking 8 weeks, see earlier posts, as it is here now, let's trade it.

Equities.

This will be the instruments to watch and trade for those of us that diversify. The downgrade in the US will mean that the fear contagion seen last week with just about every long only US fund repatriating foreign and domestic equity holdings will continue. The trigger to look out for tonight as I have hinted at plenty of times last week is the KOSPI, that will set the tone for the first half of the week. DOW and es will see another 5-10% drop.

Gold

With the risk aversion driving this another week, Gold will see another move up as long as the equities keep selling of, nowhere else to go really for investors. The only thing that will keep Gold rising is profit taking to cover losses in other instruments. Bit of a if-then-if, large rally drops in DOW and es will not see a rise in Gold as investors will unwind positions, smaller drops and whipsaws in equity prices will see Gold increasing its value. Not an instrument I will be trading this week, but will keep a close eye on.

Oil

WTI will see a large correction again as long as equities keep on dropping, Brent not as much, as it is driven by the underlying fundamentals on the euro.

T-bills

We will see some undwinding in T-bills by AAA mandated holders. Sovereign holders are not limited by that and the T-bill, despite the downgrade will still be a safe haven. Keep an eye on AAA rated institutional bonds as we could well see an increased appetite there, AAA US company debt could well be seen as a safer place to be then T-bills for some domestic bond holders.

Will we see an increase in yields now, no probably not, the one to watch is 2-yr T and 10-yr.

Euro

Will the euro see a rapid rise on the back of the US downgrade? Probably not, as long as the US yields stay roughly the same. There are still some very major underlying fundamental issues in euroland. Italy will be a driver again this week and traders should keep an eye on what comes out there. The parliament has cancelled the summer recess and will continue to find about 40-50Bn of austerity measures this week. Last week 4 members of the ECB board voted against buying Italian debt, focusing instead on Portugal, Ireland and Greece. This is a very important hint from the ECB to Italy to get its house in order. They have to refinance roughly 380Bn in the next 3 months and with current yields will not be able to do so and will need a bailout. They run out of cash in the next 7 weeks.

Italy will be a biggie, the EFSF cannot afford to bail them out and with Germany's reluctance to accept the EFSF, as seen last Thursday when the ECB announced further debt purchases, Italy could well break the euro.

Germany has 2 issues with the EFSF, it is against the German consitution and Germany will continue to want a EU consensus for each change in the EFSF, meaning, each and every member will get a vote.

With the current EFSF structure not going to vote until the end of September and with Italy running out of cash in the same time, we got a nice little boiling pot in the making.

Traders will keep all of this in the back of their mind. Is the euro really a good alternative right now? Not really, the ECB made the mistake to raise rates, in hindsight due to the current climate, and the inability to ratify the EFSF is weighing heavily on the markets.

Trade hints: keep an eye on 10-yr Italian and Spanish yields and keep a close watch on the news wires to see what comes out of Italy and Germany.

Initially we will see an appreciation in the value of the Euro vs, the Dollar, purely based on contagion risk and the dramatic drop in equities we are likely to see, coupled with the kneejerk reaction to the downgrade.

I for one will not be trading this pair tonight and will wait to see what the KOSPI does, and what London is going to bring to the table.

Keep an eye out to for news out of the G7 phone conference later today.

Dollar

Will the dollar lose its reserve currency and "safe haven" status on the back of the downgrade, no. There is no way that the worlds CB's are going to dump dollar en masse, there is nothing to replace it. Oil down to levels where it is, is hurting the ME, most of them have planned their budget for 100 dollar levels, not the 80-odd it is trading at right now.

The Chinese hold 1 Trn worth of US debt and mutliples of that in dollar cash, they for one are not going to dump dollars, that will only hurt their exports even more.

Summary

Eyes on equities, trade the increase in value of the Euro initially on the knee jerk reaction, don't go planning on position trades just yet to see confirmation of the dollar holding its value. Will we see a bigger drop in equity markets then we did during the sub-prime mess, yes I for one can see that in the making as this equity slide is based on collective fear with no single item to point at, as the sub-prime mess was, couple that with interest rates globally at zero and each and every governement maxed out in their bailout funds, we will see interesting times in the next few weeks, and a larger equity drop then Lehman triggered.


Enjoy next week, I for one will be focusing heavily on Equities and will avoid EURUSD till the London open tomorrow.

BTW, who suspended Faller, I was really looking forward to his illiterate ramblings later on to keep me occupied.

G7 will remain in close contact during asian open and ECB may also be in action.BOJ says intervention is not yet over.the speculators are being warned verbally.i assume there wouldn't be much action upto US session end and markets will continue to be tightly monitored.
We don't know which options are going to expire at what levels.Below 76.28 there may be huge selloff in dollar as stops are triggered.i may take a shot with tight SL in quiet hrs if price keeps flirting with this level
If BOJ does intervene with other central banks we may see this go to max 85.5 which would be a good point to sell.
if BOJ intervenes on its own they can manage to hold this hardly to 80-82 levels.
these levels have been derived from historical PA

Ty for your view on this.. Noted a few things

@cloggie

thank you very much for sharing your views with us. that's very helpful.

http://www.forexfactory.com/showthre...34#post4841234

since you're saying taking a shot in quiet hours, i guess you're talking about going long, right?

Cheers, very interesting read

Excellent review. TY.