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EurAnalysis Kindergarten 24 replies

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EurAnalysis

  • #24,361
  • Mar 14, 2012 10:47am Mar 14, 2012 10:47am
Time to go to the hardware store!
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I observe your reality but live my own.
  • #24,362
  • Mar 14, 2012 10:50am Mar 14, 2012 10:50am
Quoting PipTrapper
Here's the simple answer:

US economy is doing well
EZ economy is faltering

Capital is flowing to US
Capital is flowing out of EZ

Liquidity is not always capital and in this case EZ liquidity is debt

Here's the rational behind it all:

In the past, in a risk-on environment, all risk assets rallied. Risk assets included securities and commodities outside of the US where yield was higher due to rate differentials. Not only did investors get better returns from non-US investments due to growth of emerging markets, but they also made...
Stunning explanation PT .

I could guess all these, but i wasn't able to structure it out. Now i got good idea about it.

Thank you !!!
  • #24,363
  • Mar 14, 2012 10:55am Mar 14, 2012 10:55am
am too busy download porn movies all day and the fiber just going down like that,keep download
If there was easy money lying around,no one would be forcing it into your
  • #24,364
  • Mar 14, 2012 10:56am Mar 14, 2012 10:56am
Well price has held below all its averages today. Which makes this an interesting situation. A lot of people might consider this a good buy and a lot of people probably think it's good sell. I have a feeling the next few weeks will be pretty wild.
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  • #24,365
  • Mar 14, 2012 11:00am Mar 14, 2012 11:00am
Missed an opportunity at 1.306 but never mind plenty more to come
Going out so set my TP on one of the short at 1.29825....
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Bulls Run. Bears Bite. We Profit.
  • #24,366
  • Mar 14, 2012 11:02am Mar 14, 2012 11:02am
Quoting FXMindset
am too busy download porn movies all day and the fiber just going down like that,keep download
lol
Share the good one with me bro
Bulls Run. Bears Bite. We Profit.
  • #24,367
  • Mar 14, 2012 11:09am Mar 14, 2012 11:09am
Quoting Harpe Eagle
lol
Share the good one with me bro
bad connection still here bro,since am change other internet provider..seriouslly my MT4 prices a little bit hang now...
If there was easy money lying around,no one would be forcing it into your
  • #24,368
  • Mar 14, 2012 11:09am Mar 14, 2012 11:09am
Quoting Harpe Eagle
lol
Share the good one with me bro
Check your PM
Those who say it cannot be done should not interrupt those who are doing it
  • #24,369
  • Mar 14, 2012 11:14am Mar 14, 2012 11:14am
Quoting Harpe Eagle
Going out so set my TP on one of the short at 1.29825....
Why 1.2982? I don't see where this is a resistance level? Is it a FIB number?
I observe your reality but live my own.
  • #24,370
  • Mar 14, 2012 11:23am Mar 14, 2012 11:23am
I even see more lower with this one
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If there was easy money lying around,no one would be forcing it into your
  • #24,371
  • Mar 14, 2012 11:23am Mar 14, 2012 11:23am
Quoting Cgb
Why 1.2982? I don't see where this is a resistance level? Is it a FIB number?
I believe he set it there just in case price does not make it all the way to double bottom at 1.2973 (10 pips short of double bottom)
When you add the spread plus a failure to reach the target by a few pips, you're already up to 5 or 6 pips. 10 pips just makes gives it a better margin for error.

Of course I could be wrong and he's got some magical fib line there.
Those who say it cannot be done should not interrupt those who are doing it
  • #24,372
  • Mar 14, 2012 11:26am Mar 14, 2012 11:26am
while people afraid when the euroswissie if bull then will affect EuroDollar too,there's no kind of this scenario...trade many times and look the price behavior,but this is only my personal opinion ya..dont kill me
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If there was easy money lying around,no one would be forcing it into your
  • #24,373
  • Mar 14, 2012 11:26am Mar 14, 2012 11:26am
Quoting PipTrapper
I believe he set it there just in case price does not make it all the way to double bottom at 1.2973 (10 pips short of double bottom)
When you add the spread plus a failure to reach the target by a few pips, you're already up to 5 or 6 pips. 10 pips just makes gives it a better margin for error.

Of course I could be wrong and he's got some magical fib line there.
Got it. Thanks...
I observe your reality but live my own.
  • #24,374
  • Mar 14, 2012 11:43am Mar 14, 2012 11:43am
Very interesting post PT. I share a few of your reasons, not sure if some of your points are true and I disagree with some others.

US economy is doing well [agree]
EZ economy is faltering [not really is bottoming and flattening considering the EZ as whole]

Capital is flowing to US [agree]
Capital is flowing out of EZ [not really, last ECB numbers show an important influx of healthy and quality money going back to EZ...1st time since the debt crisis started]

Liquidity is not always capital [agree] and in this case EZ liquidity is debt [not true and not at all...on what are you basing this comment]

In the past, in a risk-on environment, all risk assets rallied. Risk assets included securities and commodities outside of the US where yield was higher due to rate differentials.

Not only did investors get better returns from non-US investments due to growth of emerging markets, but they also made a return on the interest rate differential. [agree ...that's why interest rates are the most important macro factor in currencies]

....... on your €75,000 investment......of getting $100,000 for your €75,000, you get $105,000. Hey that's a 5% return on your money that didn't even make a profit. ... [well sure but is mostly irrelevant ...exchange rates always work like that but that's not what 95% of currencies exchange transactions are....otherwise lets work our ass off in pounds and exchange them in Zimbabwe dollar..you will get 5% an hour ]

1. Businesses in Europe are losing money [not true..base on what?]
2. Businesses in America are making money [agree they always are...]
3. There is effectively no rate differential any more between US and EZ [NO !!! not true that's IMO a very wrong statement. 0.25% to 1% is a huge difference ..thats why the euro is still 30% more expensive than the dollar....the next macro move in the pair will come from there 100% Guarantee]
4. The general market sentiment is to sell EUR on rallies [well sure ...]
5. The ECB is expected to cut rates further [Not true not all. why do you say that]
6. The ECB has provided 3 year LTROs at a ridiculously low rate and flooded the markets with borrowed liquidity (much like what the Fed did with QE1 and QE2) [true but it worked in the US so why not in the EZ so let see]
7. This is election year in US and the Fed is not about to devalue the US any more than it has to because Bernanke may be out of a job after the elections if he continues. [well not sure what you mean but agree elections are a key factor to keep the money flowing in the US]

sisse
Pending conversations? PM for a chat...I am mainly in OTM now
  • #24,375
  • Mar 14, 2012 12:13pm Mar 14, 2012 12:13pm
Quoting sisse
There is effectively no rate differential any more between US and EZ [NO !!! not true that's IMO a very wrong statement. 0.25% to 1% is a huge difference ..thats why the euro is still 30% more expensive than the dollar....the next macro move in the pair will come from there 100% Guarantee]
Hello Sisse,

Can you please explain the relation between the interest rate differential and comparative strength of the currency???
I can understand that more the interest rate, more the investors will be interested in and that might result in strengthening of the currency with higher interest rate. But is any other relation??? Or just the general economic health???

Because, when USD is compared with AUD, it is 0.25% and 4.25% as you know. But AUD is less expensive than EUR when compared with USD even with higher interest rate. Even AUD has been below parity. So is NZD. Can you please explain this scenario???

Thanks in advance.

FXT
  • #24,376
  • Mar 14, 2012 12:14pm Mar 14, 2012 12:14pm
I expect a reverse here. 60 SMA holding and retrace to neckline.
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I observe your reality but live my own.
  • #24,377
  • Mar 14, 2012 12:19pm Mar 14, 2012 12:19pm
wonder if this drop will have enough to break 1.3000 *crosses fingers*
  • #24,378
  • Mar 14, 2012 12:30pm Mar 14, 2012 12:30pm
Quoting JockFX
wonder if this drop will have enough to break 1.3000 *crosses fingers*
IMHO, I don't think so. Day is pretty much over and I expect sideway movement until Asian session tonight. I think 1.3015 to 1.3045 is range.

USDX didn't close above 81.000 on 15M chart and I don't see it doing that for the rest of the day.

I'm still holding shorts and heading out for a motorcycle ride. Received the hard case saddle bags today, so you can expect to find me in the garage tonight installing them

Cheers guys and have a great day.
I observe your reality but live my own.
  • #24,379
  • Mar 14, 2012 12:32pm Mar 14, 2012 12:32pm
Euro / DOW is still decoupled. DOW moving up again and Euro moving down.

Cheers!
I observe your reality but live my own.
  • #24,380
  • Mar 14, 2012 12:43pm Mar 14, 2012 12:43pm
Quoting Cgb
Euro / DOW is still decoupled. DOW moving up again and Euro moving down.

Cheers!

Have a good one
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