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  • #761
  • Oct 5, 2011 11:18pm Oct 5, 2011 11:18pm
Quoting drtorque
dont bet against the euro??
http://www.bloomberg.com/news/2011-1...ical-will.html
You may want to read between the lines on this article. The headline is misleading. It suggests the euro will not depreciate in value. Meanwhile the meat and potatoes of the article tells the reader to not bet against the survival of the euro as a single currency. If the euro drops in value to par with the US dollar but the euro zone stays intact, then the euro has survived.
Those who say it cannot be done should not interrupt those who are doing it
  • #762
  • Oct 5, 2011 11:19pm Oct 5, 2011 11:19pm
Quoting Forex Hulk
Hello PipTrapper,

Sorry for the delay been busy with our fundamental analysis and trading. I will try to post on here regularly.
That's excellent ForexHulk. Looking forward to it.
Those who say it cannot be done should not interrupt those who are doing it
  • #763
  • Oct 5, 2011 11:25pm Oct 5, 2011 11:25pm
Quoting Gofer Pips
Please read this as it is pretty much my sentiment there at the end when the climax of the movie is played.

http://seekingalpha.com/article/2976...o-take-control
Thanks for the link Gofer.
Excellent picture of the truth. Nice, clear, concise and no sensationalism. Just the facts.
Those who say it cannot be done should not interrupt those who are doing it
  • #764
  • Oct 5, 2011 11:26pm Oct 5, 2011 11:26pm
Quoting BullsVsBears
Well, I was able to nab 25 pips so I got my leverage for the major short coming soon at my predicted resistance 1.341... I'll stand aside until that time... Good luck and may the pips be with you
Congrats on your 25 pips BvB
Those who say it cannot be done should not interrupt those who are doing it
  • #765
  • Oct 5, 2011 11:29pm Oct 5, 2011 11:29pm
Quoting Ron1n
Just when people thought the recession was over and things were looking up, stocks dive and the dollar does well again? Funny how that works.
Hi Ron1n and welcome to EurAnalysis
If you haven't already done so, please familiarize yourself with this thread's objectives and rules on page 1
We look forward to your future contributions to EurAnalysis
Cheers
PT
Those who say it cannot be done should not interrupt those who are doing it
  • #766
  • Oct 5, 2011 11:43pm Oct 5, 2011 11:43pm
Quoting drtorque
Pt - very smart thinking. all you're saying makes sense to me, too..

one thing though... the last Fed invention was this "operation twist" , before that it was, no rate hikes until 2013 thing.. if im not wrong (i may be).
when they came up w/these, at most a month ago i suppose, was the economy heading/turning for the worse? i guess not. not significantly at least..
but there was not much of an improvement either.

/...
That is correct. Even though it was not improving, the economy was not taking a significant turn for the worse. Had it been, then we probably would have seen QE3. However, because it wasn't and because the Fed needs to appear to be doing something, 2 months ago they did the "lower rates till mid 2013" thing and last month they did the twist.

Remember though that in both occasions there were 3 dissenters (the same 3 both times) and also that the statement made it very clear that fiscal policy makers in Washington DC had to do their part. That is a very strong message to congress that the Fed can only do so much. That is still the Fed's position and it was even explicitly mentioned in Bernanke's testimony to the economic joint committee on Tuesday.

Cheers
Those who say it cannot be done should not interrupt those who are doing it
  • #767
  • Oct 5, 2011 11:54pm Oct 5, 2011 11:54pm
Quoting PipTrapper
Congrats on your 25 pips BvB
Thanks, thought I'd grab some quick pips and stand aside. Price is really fighting at that 1.336 area. I also noticed the 1.341 is at 50% fib and resistance for 8EMA on a daily.
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I have multiple personalities... Bull today Bear tomorrow!
  • #768
  • Oct 6, 2011 12:05am Oct 6, 2011 12:05am
Quoting PipTrapper
That is correct. Even though it was not improving, the economy was not taking a significant turn for the worse. Had it been, then we probably would have seen QE3. However, because it wasn't and because the Fed needs to appear to be doing something, 2 months ago they did the "lower rates till mid 2013" thing and last month they did the twist
Remember though that in both occasions there were 3 dissenters (the same 3 both times) and also that the statement made it very clear that fiscal policy makers in Washington DC had to do their part. That is...
Thanks PT! you know your job, very enlightning.
  • #769
  • Oct 6, 2011 12:16am Oct 6, 2011 12:16am
If the economy ever picks up, the USD is going to crash, way below anything it has already done.

You can approach this from a technical perspective. The USD is a risk off currency, so if we every have another period of risk on (and the last year did not really count) then the USD will decline.

Or you can approach it from fundamentals. A vast sum of USD exists in bank accounts around the world. Some of it is in foreign reserve, some of it is artificially created QE and a lot of it is just plain good old fashion hording. Right now it is locked in vaults as so is effectively sealed off from the market, but once things pick up, it will all go out in the world and start causing problems. And with the fractional reserve ratio, the quantity of USD will be magnified many times over. And when the market is flooded with USD, the price of the USD will go way, way down.

But for now, I am still a happy Euro bear. Winter is coming. Things may get warmer before they get colder, but they will definitely get colder.
Kill the ego, or it will kill the mission.
  • #770
  • Oct 6, 2011 12:17am Oct 6, 2011 12:17am
Quoting drtorque
Thanks PT! you know your job, very enlightning.
PT should run for Fed Chairman.... He knows his monetary policy. I tell you, if he does maybe he can give us a heads up before he makes any sentiment shifting news breaks
I have multiple personalities... Bull today Bear tomorrow!
  • #771
  • Oct 6, 2011 12:22am Oct 6, 2011 12:22am
Quoting AaronWard
If the economy ever picks up, the USD is going to crash, way below anything it has already done.

You can approach this from a technical perspective. The USD is a risk off currency, so if we every have another period of risk on (and the last year did not really count) then the USD will decline.

Or you can approach it from fundamentals. A vast sum of USD exists in bank accounts around the world. Some of it is in foreign reserve, some of it is artificially created QE and a lot of it is just plain good old fashion hording. Right now it is locked...
I am too Aaron! You are right... That's why China is screaming for a new reserve currency... Look at Libya... Gaddafi warned the African nations to no longer trade oil for USD or Euros only gold. The pot is definitely boiling
I have multiple personalities... Bull today Bear tomorrow!
  • #772
  • Oct 6, 2011 12:25am Oct 6, 2011 12:25am
My point of view:

About QE3:
QE2 proved... in fact nothing. It just made stocks happy. But it did not help reduce the unemployment rate, did not cause amazing increase in growth; maybe it just put off the things for one year. That is why I think FED will use QE3 as 'last resort' method - it does not seem very effective. Trying to make rates even lower is hard to imagine, but still japanese are lower. Still, encouraging to spend money when you are in debt is not a good solution. Operation Twist is what I found reasonable - it makes debt problem easier to tackle. And I think this will help more in the long term.

About today ECB rates decision and future outlook:
I cannot give any good reasons, but I get this bad feeling, that they will stick to the current level... desperately. I am going to delete some of my sell limits, because I think our nice downtrend faces high risk right now. But I will be watching carefully the ECB statement, and if it will even smell with lowering rates, then I jump in with at least twice as much as I trade normally.

EUR perspective:
Even if we don't get the fall predicted by PT this week, the EZ has plenty of possibilities to let the stocks down. And its currency with it. So we may get to the top of the channel, and try to break it, but after all we shall get back to it. Worst case - we will get into a parallel one. But actually I do not expect that, since any EUR move up is just a half of the moves on AUD/USD or USD/CAD or commodities. In short, when dollar loses X, EUR/USD gains only about X/2. If we get any trigger, the fall shall be nice.

To sum up:
I am really careful right now, since I stupidly lost too much this week, so I will enter after i get a bad-EUR fundamental.

Cheers, trade safe (not like me )
  • #773
  • Oct 6, 2011 12:28am Oct 6, 2011 12:28am
Quoting AaronWard
If the economy ever picks up, the USD is going to crash, way below anything it has already done.

You can approach this from a technical perspective. The USD is a risk off currency, so if we every have another period of risk on (and the last year did not really count) then the USD will decline.

Or you can approach it from fundamentals. A vast sum of USD exists in bank accounts around the world. Some of it is in foreign reserve, some of it is artificially created QE and a lot of it is just plain good old fashion hording. Right now it is...
Aaron, I fully agree that the world will be flooded with overwhelming supply of USD. However I believe you may be missing one important factor here. If it unfolds as you say, then the result will be massive inflation and the Fed will have no choice but to tighten monetary policy by contracting their balance sheet and/or raising rates.

Mind you, regardless of the above, as long as the European economy recovers just as well as that of the US, then the Euro will still appreciate against the USD because the ECB, as usual, will tighten their monetary policy even more.

It is a game of automatic market re balancing as each currency adjusts policy to keep the economy moving while keeping inflation in check.
Those who say it cannot be done should not interrupt those who are doing it
  • #774
  • Oct 6, 2011 12:30am Oct 6, 2011 12:30am
Quoting BullsVsBears
PT should run for Fed Chairman.... He knows his monetary policy. I tell you, if he does maybe he can give us a heads up before he makes any sentiment shifting news breaks
Ha Ha. That's a thankless job. No thanks Let Bernanke do the sweating. I'll just rake in the pips
Those who say it cannot be done should not interrupt those who are doing it
  • #775
  • Oct 6, 2011 12:39am Oct 6, 2011 12:39am
PT, 3310-3370 seems to be your sell zone?
but if something happens and this 3370 breaks, its clear highway until 3550's..
I mean it looked like that to me.. long shot, but..
and considering all stock markets are up for 2 days, but not much in euro..
  • #776
  • Oct 6, 2011 12:42am Oct 6, 2011 12:42am
Quoting PipTrapper
Ha Ha. That's a thankless job. No thanks Let Bernanke do the sweating. I'll just rake in the pips
Yeah, that's exactly what I'm doing... I'm going to take a little nap I'm dog tired. I'll be back during the ECB decision. Good luck and may the pips be with you!
I have multiple personalities... Bull today Bear tomorrow!
  • #777
  • Edited 1:10am Oct 6, 2011 12:55am | Edited 1:10am
Today before the ECB rate decision and press conference, I project that we will see more advances in the equity indices as some traders and investors cover their shorts before the major risk event. This may squeeze out some euro bears as their stop losses are hit.

The ECB's rate will be released 45 minutes before the press conference. If there is no drop in the rate, I expect some more short coverings but with limited impact as a rate cut is not expected and therefore its absence is already mostly priced in to the markets. However, if they cut rates, then expect further limited selling by the Euro bulls as traders unwind some of their interest rate differential carry trades causing a shift from bull positions to bear positions.

After that, we have the press conference. This is going to be a very volatile period. The euro will jump up and down by 100+ pips while the market absorbs what Trichet is saying and will continue to be volatile while he is answering questions posed to him by the media and will probably continue for at least 30 minutes after with most of the effect being seen at US market open.

The end result is hard to call. However, any move by the ECB which will result in a euro-positive sentiment will be short lived, as the market then immediately focuses on tomorrow's 'holy grail' NFP report. Furthermore, any move by the ECB which results in a euro-negative sentiment will see the euro continue it's downtrend to once again challenge the 1.3150 lows.

If you still have not read the following article, then I suggest you do in order to give you a more clear understanding of what the ECB may decide and what the probable impacts will be.

ECB Rate Decision: Breaking Down 4 Main Policy Options

Also, if any of you have open trades with tight stops in place, expect those stops to be spiked out very quickly no matter which way this goes.

Trade safe and many green pips to all of you.
.
Those who say it cannot be done should not interrupt those who are doing it
  • #778
  • Oct 6, 2011 1:02am Oct 6, 2011 1:02am
Quoting drtorque
PT, 3310-3370 seems to be your sell zone?
but if something happens and this 3370 breaks, its clear highway until 3550's..
I mean it looked like that to me.. long shot, but..
and considering all stock markets are up for 2 days, but not much in euro..
drtorque,

If I look at the what has been happening lately after 2 to 3 days of gains, I clearly see that it is then followed by 2 to 3 days of losses, with the losses being more rapid and more intense than the gains. Therefore, I cannot build a case for the bulls just because we had two days of gains

The direction of the euro today is unknown. However, the direction of the euro in the medium term is down. The technicals support this sentiment and so far the fundamentals are in line. If that changes, then I will rethink. In the meantime, everything else is speculation.
Those who say it cannot be done should not interrupt those who are doing it
  • #779
  • Oct 6, 2011 1:08am Oct 6, 2011 1:08am
PT -- I agree that the USD will not suddenly fall to USD/CAD .02. More like USD/CAD .65 over 3-4 years of good economy. (and no, this is not a serious prediction)

The US is in a tricky spot. If inflation spikes to 10%, so they raise their overnight rate to 8%, then bonds will be about 10%. 10% of a 14 trillion dollar debt would pretty much wipe out half if not more of US revenues. So the upward motion of the overnight rate is limited. My guess is the US will be quite tolerant of an inflationary economy.

I don't really worry about hyper-inflation, though. Possible, but unlikely.

I agree that when it comes to either monetary or fiscal policy, the Europeans will always print less, tighten faster and stimulate less than the Americans. So if the good times roll... go Euro.
Kill the ego, or it will kill the mission.
  • #780
  • Oct 6, 2011 1:16am Oct 6, 2011 1:16am
Quoting AaronWard
... when it comes to either monetary or fiscal policy, the Europeans will always print less, tighten faster and stimulate less than the Americans. So if the good times roll... go Euro.
that was then this is now
"If The Fool persists in his Folly he will become wise." - William Blake
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