EurAnalysis

i guess i will take care... of.. .this..
zzzzz...zzz

ima switch off too guys, best of luck to all of you

Might be a good opportunity to short EJ But...

I wouldnt advise anyone to be shorting just yet theres still bit of an upward movement left. My eyes are on the 150sma on the one day chart. Its located about 1.3930 or so. I feel a break and hold above that will cause us to re-enter the range of 1.39 - 1.45. But The euro not having the momentum to stay above the 150sma will signal a re entry to the bear market which i feel will certainly pave the way for 1.2965. My sentiment does remain bearish fundamentally everything in europe is all over the place. Its simply a case of trading what you see in front of you. I wouldnt be overly eager to short its a mindset we all seem to have! We know Europe is in dire straits its simply watching and waiting for the proper shorting opportunity! Nobody seems to have a certain answer for the strong bullish momentum but yet fairly weak news coming from Europe not to mention Trichets uninspiring words that systemic risks in Europe have increased even more. Just thought id give my two cents on the matter! Trade safely!

only place decent for a short is gold and silver.

I'm sure you are right Rod but I couldn't resist the round number for a few pips. My last trade was out at 1.3783 but have a small short now in at 1.3809.

Hey all. Sorry I've been gone so long. Had to tear through my news notes and charts and do some in-depth analysis.

Once I catch up with reading all your posts, I will post some comments.

I am flat and I plan on staying this way till today's daily candle closes. I want to see where price lands when Wall St closes.

I would be careful with gold and silver . I was sort-of perma bullish until the swiss franc was capped. When I noticed that "safe haven gold" did not skyrocket, I smelled that a downfall is coming and shorted. But I did not expect a drop below 1500, and right now it seems I was correct. But I am still not eager to jump in with a long, as I preferred 1500 level. Some say it is going to burst into 1300... well, if I will notice something that worries me, than I may reasses my view. But right now, I think gold bugs are active and will slow down any downward movement on gold, and finally it will "liberate" and no longer get that strong influence on risk-on risk-off. In fact, before bernanke said "no QE" the gold was acting like a safe haven, not like a commodity. I even made some green pips on it (and some red too ). I am flat on gold till I see good bullish signal, and then I enter a periodical perma-bullishness . Until we reach next "bubble zone".

And, reffering to the topic - I plan to make some analysis when I come back from work, and maybe even try a small long on EUR - as I said before, we broke 1.37... But, It certainly won't be a long-term trade.

becareful posting about gold on this thread...

I'm going back to the study room for the rest of the month. Happy trading all.
I'll read your posts thought

Price action. defeats all. So does psychology thanks for the heads up i am aware fo that, im not investing in gold. i trade it daily like cuurrencies.

im aware of what is the going-ons in the x's. they save me from currency mistakes, and most of my profit are from xag and xau rather than fiber or some other currency pair.

I guess some do better at commodities in general. After all, not only risk on/off affects them, but the real supply and demand data too. So trading them is different. Personally, when I review my history, I was doing better at commodities... excluding silver, which sunk me two times already.

Ok, enough offtop - lets get back to our EURUSD. (even, though commodities are partially connected - they are priced in USD... but, what on earth is not affected by USD?)

well eur/jpy is the only real cross pair. everything else is synthetic.


well here is a random euro/usd short i take now. 0.01 lot, and stop loss 20 pips from current market level.

lol its almost caught haha 5 more pips to stop loss

never mind its stopped out..

I'm also looking to short Gold and silver. However i dont think now is the optimum time to do so i still feel both have a little bit of bullishness left in them. I will short old around 1730 till about 1600 from which I see a huge rise until about 1900. I dont think we'l see the 1300 mark so many people are looking for. As for silver im looking for 35-36 from which i see a drop to about 24-23. Both commodities I find have little margin for error when entering a trade due to their high leveraging at least with my broker anyway. So just be careful you may be right but i still feel a little bit of buying is left.

Waiting for the FOMC meeting minutes. Half an hour later.

I think looking at long term direction right now is going to be a big task for us retail traders. The pair has been in this intermediate trending for a while, nothing long term as you know. Right now the Euro is built on emotions and high hopes all which will fail at some point, they have not hit the bottom in this process. Greece is no longer Greece as their society has slipped from them, it may even be a few years of this unstable mess with the Euro.

So for those that say it's going long or short are starting to feel the burn. Those that do well on this move up may go strong on their bias and trash their account in the next day or two if it goes against them. My strategy that I use for my core works most of the time, but I got burned a bit with all this back and forth, I believed a bias and broke a rule, I have a rule of no bias, just PA and SD. I think you do a great job at keeping the ideas flowing, your smart, keep in mind though nothing is truly random, even chaos is well organized lol.

continued by Trichet speech after half an hour. what a busy day

Here's the link:

http://www.federalreserve.gov/moneta...es20110921.htm

From what I read, they are discussing the possibility of further intervention. And expect a little more recovery in the pace of the economy. But that their indicators are still pointing at weakness.

No new things... so, I expect a little sell-off, and then a continuation in the mid-term trend: Bullish

Pbh

EDIT: They discussed the possibility of a QE3, but the participants also think that right now, it's not that necessesary: My interpretation, this means we are not as bad as we thought. But it's still a good excuse for a really short-term selling pressure

If trichet is coming out today... Perhaps, we'll see the bulls coming with strenght again

Could you post the link to the webcast, please?

Pbh

Hi all,

After a few hours of scratching my head, squinting my eyes, pulling my hair, shifting in my chair, flipping pages in my notes, making some calculations, intensely watching all asset classes and analyzing every time frame on my charts, I finally have a plan to make a plan.

The Euro has made a huge comeback from the lows of last Monday at 1.3144
All asset classes priced in US Dollars have followed along.
The USD Index plummeted as a result
Definitely Risk-On, but what triggered it?

Now that I have had enough time to analyze everything, here is how I believe this has all unfolded...

First the premise:

The US economy is not looking so great and the FED has pretty well done all it can in the public eye without causing an absolute revolt. QE3 would not be a great idea for many reasons, one of which is that they cannot be seen as purposely debasing the USD. The US government is pretty much a lame duck. Obama's jobs bill almost made it through but but the fact is it was defeated and more importantly, everybody new it would be. So the USA has a dilemma on their hands. The problem is not so much an economically prohibitive one. No, it is a confidence one. Consumers didn't spend because they didn't have any confidence in the economy and their job status. Corporations didn't hire because they didn't have confidence in the consumer markets. Savers didn't invest because they didn't have confidence in the markets, etc etc. Catch 22, right. Okay stay with me on this

Now come Europe. Greece is broke and will go bankrupt. The other periphery EZ countries with massive debt are next, especially if the economy keeps slowing down. The banks are not in good enough shape to absorb the losses they will incur when (not if) Greece defaults. Consumer, corporate and investor confidence is just as bad in the Euro Zone now because of all this. Fear grips everybody. Okay keep following.

All this risk-off sentiment has a huge impact on Japan because they are an export economy (much like China) and since investors see the JPY as a safe haven currency (just like they saw the Swiss Franc before the SNB put a floor on the exchange rate) The Yen was appreciating in value to the point where it was hurting Japan's exports with much lower margins. Still following? Good

So, the economy needs a magic pill to shake everyone out of their risk averse zombie like state. How does one accomplish that? The Fed couldn't do it with all their QE's and rate cuts. The BOJ tried to intervene in their currency woes but failed to make any significant impact. The Swiss managed to mitigate their woes by putting a floor of 1.20 CH to the Euro and they defended it well, but still their economy started to suffer as a result. Mer-k-ozy tried to instill confidence by saying that they had a plan to make a plan and they would get back to us. What??? The EFSF expansion failed to get Slovakia's easy vote after over 2 months. The ECB in coordination with the FED and the BOJ, through currency swaps, pledged to provide unlimited liquidity to all the Euro Zone banks in order to keep them afloat so that they can handle sovereign debt defaults, but even that was a bit of a long shot, I figured how could that protect banks from insolvency? It cannot. It can only put them (or the taxpayers) in a worse situation and it really does nothing to fix the underlying problems. Actually it creates a whole new set of problems; more debt.

So how were they gong to instill confidence in consumers, corporations and the financial markets?

Today, the ECB, the FED and the BOJ, in coordinated action, dumped USDs and JPYs and bought up EURs while Trichet was on TV talking up the Euro Zone saying all will be rectified, Greece will not default and the banks will survive, while the BOJ was saying that they are going to put a floor on the JPY.

Trichet is a very well respected central banker and the market listens to him. He has never before showed the confidence he showed today and was always critical of governments constantly sending them signals that they are not behaving themselves and the responsibility falls on them to adhere to sound fiscal policy. Did they? No. Did Greece meet fiscal target? Not even close. Did the EU leaders come up with a plan? Not really, they only came up with a plan to make a plan (he he he, I still laugh about that one). So what changed? Perception.

The USD depreciated in value causing all asset classes priced in USDs to instantly and artificially rise in value. Look at all the asset classes. I would estimate that a good portion of the gains are not from market activity but rather from the depreciation of the USD as it was used to buy Euros to provide liquidity for the Euro Zone banks. Look at all the major Yen crosses as well, Instant depreciation of the Yen also due to swaps using Yen to buy Euros plus compounded by a rush of safe haven seekers to pull their cash out of Yen to other assets (like the EUR or the GBP) out of fear that the BOJ was going to intervene on the Yen exchange rate.

So now the picture looks better because it was painted over by nice bright lights, the Euro is up, the equities are up, investors are becoming confident again and who knows? Consumers might start spending, companies might start hiring, investors will buy more equities (You know, the ones who buy the highs and sell the low. Lots of those out there), and the world will be a happy place again and all will be great. Hey they might be able to pull it off. You never know. All it takes in one month of good economic data and a few job creations and everyone could become confident again. Kick the can down the road type stuff just like we did last year before Greece was bailed out the first time. Everyone happy now?

Not so fast. Nothing is solved. The sovereign debt still exists and will keep growing. Greece will still default. Obama still has no jobs bill. The housing sector in the US is still in shambles... and a whole load of other stuff I am sure I don't have to list, nor do I want to because I want to stop typing soon anyway

In a nutshell we are still screwed and soon the bubble is going to burst. Once the markets properly digest what just happened, the house of cards will come tumbling down.

I am still very bearish on the Euro. I just have to pick my battlefield and I believe it will be here sooner than we think.

So, here is my chart for now. Price is at the 50% fib as indicated on the chart. Yes it fell quickly but it came up just as quickly. Will it reverse to the downside again now? Probably not, but I am not ruling it out. I need to watch my charts, plan it all out and follow price action. I have no plan right now but once I take a position, I will announce it immediately.

In closing, I have not very often seen a retrace on a daily chart that has moved so far, so quickly without at least pulling back to a previous fib level. This week's move needs to consolidate. When I get a signal that the time has come, I will post it. Until then or until I am convinced that we are in a longer term bull market, I am flat.

Cheers
PT



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Thank you PT
amazing analysis. just a pleasure.

I hope you are right... I am close to the "total disaster"

thank you

regards