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  • #2,481
  • Oct 13, 2011 10:16am Oct 13, 2011 10:16am
Quick bounce then nothing. Could this be a sell the news event?
  • #2,482
  • Oct 13, 2011 10:20am Oct 13, 2011 10:20am
Quoting ntrprz
Quick bounce then nothing. Could this be a sell the news event?
Read my previous post. It's not just Slovakia. Fitch reaffirmed UK AAA rating. Money flowing from USD to GBP and therefore weakening dollar slightly

Slovakian vote is a non-event
Those who say it cannot be done should not interrupt those who are doing it
  • #2,483
  • Oct 13, 2011 10:33am Oct 13, 2011 10:33am
Quoting teleblue
Here's an interesting point of view:

http://www.dailyfx.com/files/101111_..._12_months.pdf
This is one of the things that is bothering me the most about our bearish stance on the Euro.

Retail traders and brokers tend to be very "anti-euro". Basic rhetoric is "Greek will default for sure, at least one other country is likely to default, possibly the banking system will collapse." Predictions are typically below 1.30. Most are around 1.20-1.25.

Banks on the other hand are far more bullish. Their predictions are typically 1.35-1.50. It is easy to discount Tranco when he says "Euro 1.5". But when all the banks say 1.35-1.50, it is not so easy.

I have read a few banking reports. They say that any prediction needs two factors. The first and less important factors are the risk elements: default, panic, etc.These involve a one time risk event which is easily factored into the price and then forgotten. The second, and more important element is the flow of goods and money from one country to another. Mr. Smith buys a Merc with USD, some of that money needs to be changed into Euro's to pay workers.

Our conceptual framework is based upon the first and least important framework. At 1.35 we think "down". But the bankers at 1.35 think "up". And what they think matters far more than what we think.

Quite simply, the bankers are the market. And if they think 1.35 or 1.45, the odds of it going to that level are very high because when it is below 1.30 they are going to think "cheap, cheap, cheap."

Your thoughts (PipTrapper in particular) would be appreciated on this matter. I am trying to reconcile this conflict. I see it as extremely important for all of us, at least those of us that pay attention to the fundamentals.

Thanks.
Kill the ego, or it will kill the mission.
  • #2,484
  • Oct 13, 2011 10:49am Oct 13, 2011 10:49am
Quoting AaronWard
This is one of the things that is bothering me the most about our bearish stance on the Euro.

Retail traders and brokers tend to be very "anti-euro". Basic rhetoric is "Greek will default for sure, at least one other country is likely to default, possibly the banking system will collapse." Predictions are typically below 1.30. Most are around 1.20-1.25.

Banks on the other hand are far more bullish. Their predictions are typically 1.35-1.50. It is easy to discount Tranco when he says "Euro 1.5". But when all the banks say 1.35-1.50,...
One of the best comments I've seen yet. I appreciate the insight. What I hope happens is usually what doesn't happen. I really hope it hits 1.30. This confirms it won't be so easy.
  • #2,485
  • Oct 13, 2011 10:52am Oct 13, 2011 10:52am
Quoting chodd22
One of the best comments I've seen yet. I appreciate the insight. What I hope happens is usually what doesn't happen. I really hope it hits 1.30. This confirms it won't be so easy.
Hi Chodd,

I too think it will hit 1.30, but I am trying to figure out why the bankers don't. And most importantly, how much is their prediction going to influence the actual outcome of price discovery.
Kill the ego, or it will kill the mission.
  • #2,486
  • Oct 13, 2011 10:54am Oct 13, 2011 10:54am
Quoting PipTrapper
Slovakian Parliament approve EFSF

... and Fitch affirms UK AAA rating

This is both EUR and GBP positive., however, only GBP gaining ground.
EUR spike up on USD slight weakness while money flows from USD to GBP

ADD: EUR fades spike. GBP maintaing slight gain. Equity indices making slight recovery

UPDATE: Risk assets a bit volatile on news. Also effected by euro session close in 15 minutes. Lots of fear and greed playing out here.

[b][color=Red]UPDATE...
Thanks for update.

where do you usually have sources?
cnbc on tv? bloomberg?
Have I got something on my face, SOLDIER?
  • #2,487
  • Oct 13, 2011 10:58am Oct 13, 2011 10:58am
I think you bring up a great point. I guess in the scheme of things, bankers have the second most power to central bankers. In the end, which will prevail? I still think the macro will ultimately prevail, but in the short run, bankers can definitely be a pain towards the long term picture.
  • #2,488
  • Oct 13, 2011 11:00am Oct 13, 2011 11:00am
Quoting PipTrapper
UPDATE 2: EUR may retest 1.3735 area as USD slightly weakens.
So, no more hopes for Slovakiageddon. But I didn't hope much for that anyway. And my SL got hit for sure, I'll have an opportunity to try to place my entry higher, when I come back home Don't rush in, the hope dies last . But when it will die, the EurAnalysis bears will be there ready for action .

I don't have my charts available, but I assume we are now touching the bottom channel line from the downside. If the crazy Euro backed up by Merkozy Shaman Squad won't get back into it, we may not move too far today and even tomorrow. But if we take small consolidation, then I would be expecting a break down. Right now I guess 'hope' is losing steam, and 'fear' is slowly increasing. Soon 'hope' may get smashed by 'fear'.
  • #2,489
  • Oct 13, 2011 11:03am Oct 13, 2011 11:03am
Quoting AaronWard
Our conceptual framework is based upon the first and least important framework. At 1.35 we think "down". But the bankers at 1.35 think "up". And what they think matters far more than what we think.
It's not the bankers who think "Buy it, it's cheap". It's the consumer and commercial sector. The banks are there to meet the needs of these sectors so they exchange based on their demand. This sector is big but not as big as the investment and trading market... and I'm not talking retail but institutional. Banks do not buy currencies to hoard them. It makes no sense to keep them on the books doing nothing. Institutional traders (Banks, fund managers, etc) who trade currency do it to profit off the rate differential. That is the driving force behind institutional trades, not commerce. Same as retail trading except institutional is much much bigger. Then of course don't forget the central banks. They are the ones in full control.

.
Those who say it cannot be done should not interrupt those who are doing it
  • #2,490
  • Oct 13, 2011 11:09am Oct 13, 2011 11:09am
Quoting bumapatria
Thanks for update.

where do you usually have sources?
cnbc on tv? bloomberg?
CNBC TV. USA and Europe. Got them both on tap
Those who say it cannot be done should not interrupt those who are doing it
  • #2,491
  • Oct 13, 2011 11:12am Oct 13, 2011 11:12am
interesting, there is a pinbar formed in 4H chart...
As Above, So Below
  • #2,492
  • Oct 13, 2011 11:14am Oct 13, 2011 11:14am
Okay. It's all fading again
Euro is losing strength.
USD is gaining (slowly)
Equity indices are fading back to previous levels.

I am still on alert but have stepped down from defcon 3 to defcon 2
Those who say it cannot be done should not interrupt those who are doing it
  • #2,493
  • Oct 13, 2011 11:16am Oct 13, 2011 11:16am
Quoting tashkent
interesting, there is a pinbar formed in 4H chart...
One broker's H4 will differ from another one's depending on the time zone of the server. I believe this is deliberate.

That is why H4 and Daily candles cannot be assumed to be the same on all platforms.
Those who say it cannot be done should not interrupt those who are doing it
  • #2,494
  • Oct 13, 2011 11:18am Oct 13, 2011 11:18am
Quoting PipTrapper
It's not the bankers who think "Buy it, it's cheap". It's the consumer and commercial sector. The banks are there to meet the needs of these sectors so they exchange based on their demand. This sector is big but not as big as the investment and trading market... and I'm not talking retail but institutional. Banks do not buy currencies to hoard them. It makes no sense to keep them on the books doing nothing. Institutional traders (Banks, fund managers, etc) who trade currency do it to profit off the rate differential. That is the driving force...

Your point that banks are not currency hoarders but exchange facilitators is excellent, and I agree that central bankers are the top dog.

But still, putting aside the power of the central banks, banks & the shadow banking system really drive the system, and they seem to think 1.35-1.50 is the range.

So I have two questions

1. Do you think we can safely discount these predictions?

2. How much of the market is driven by speculation and how much of it is driven by commerce?

Thanks
Kill the ego, or it will kill the mission.
  • #2,495
  • Oct 13, 2011 11:21am Oct 13, 2011 11:21am
Sorry I can't link and I don't think it is really right to cut an paste the whole article as I have thought about it. Long and short of it is the belief of one analyst is that the recent Euro rally is nothing but short covering off a few good news pieces at a strong psych level. That this trend as the shorts have unwound will not be long lived.

It is in my news feed on IBFX, so you can look there if you use that platform.
  • #2,496
  • Oct 13, 2011 11:23am Oct 13, 2011 11:23am
you are right. the market is digesting the news. things should get more clear within hours...
As Above, So Below
  • #2,497
  • Oct 13, 2011 11:29am Oct 13, 2011 11:29am
Quoting AaronWard
Your point that banks are not currency hoarders but exchange facilitators is excellent, and I agree that central bankers are the top dog.

But still, putting aside the power of the central banks, banks & the shadow banking system really drive the system, and they seem to think 1.35-1.50 is the range.

So I have two questions

1. Do you think we can safely discount these predictions?

2. How much of the market is driven by speculation and how much of it is driven by commerce?

Thanks
1. As mentioned in the report, banks prepare these forecasts way in advance and therefore do not reflect current influencing factors. One of my relatives works in the IT dept of RBC and he tells me that their forecasts are primarily based on mathematical models and secondarily by a checklist of certain fundamental factors derived from central bank economic forecasts... and we know how accurate central banks are. They say Euro is strong and stable while it dumps 1400 pips.

2. Institutional speculation will always drive the market. Commerce and retail trade just follow along.
Those who say it cannot be done should not interrupt those who are doing it
  • #2,498
  • Oct 13, 2011 11:30am Oct 13, 2011 11:30am
Quoting ntrprz
Sorry I can't link and I don't think it is really right to cut an paste the whole article as I have thought about it. Long and short of it is the belief of one analyst is that the recent Euro rally is nothing but short covering off a few good news pieces at a strong psych level. That this trend as the shorts have unwound will not be long lived.

It is in my news feed on IBFX, so you can look there if you use that platform.
Is the one reporting it Raghee Horner ?
Those who say it cannot be done should not interrupt those who are doing it
  • #2,499
  • Oct 13, 2011 11:34am Oct 13, 2011 11:34am
Thanks PipTrapper
Kill the ego, or it will kill the mission.
  • #2,500
  • Oct 13, 2011 11:34am Oct 13, 2011 11:34am
Quoting highway
Merkozy recently went to an Egyptian tomb and studied why the Pharoah was able to survive so long in spite of all the Eygptian troubles at those times.
Merkozy meditated together and their spirit met the Pharoah. Merkozy asked how the Pharoah could survive so long.
The Pharoah told them that he has a bird IBS and it ate the shit of of the Pharoah and the Pharoah ate the shit of the IBS bird.
Merkozy flew back to Brussel and with that inspiration came out with this SHIT miracle to save the European mess.
That's a great story

Thanks for your post and a good belly laugh highway.
Welcome to EurAnalysis
If you haven't already done so, please read page 1 in order to familiarize yourself with the objectives and rules of this thread.
We look forward to more funny stories.
Cheers
PT
Those who say it cannot be done should not interrupt those who are doing it
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