EurAnalysis

The fundamentals supporting a bullish U/CAD trade are solid at this moment. Yes, things can change. For example, the BOC may decide to raise rates. It would be a very stupid move, but then stupidity exists everywhere. Just look at the Fed for a perfect example.

big spoilt brat!!

TD bank put out report stating .25 increase for late 2013 would be recommended....according to bnn

home sales super positive, yet USD doesn't gain.

That's why you have to allow for a 5 to 10 pip variance in these markets. Different brokers have different feeds. The higher up in the hierarchy the broker is, the closer to true Interbank market price they are.

Based on my charts, the 61.8% fibo is at 1.24606. The lowest H1 close is 1.24607

In order for me to feel comfy about a close below the fib line, I will also want to see either the next candle test it as resistance, or a breach of the next support at 1.2440

We (as Canadians) are, and we're shaking our heads

Of course late 2013. That's when they expect the Fed to increase rates also.
What do banks really tell us anyway? They only tell us what they want us to know.

Also, why should a bank's traders be any better than you or I? Sure they have access to much better compiled data, statistics and brainy analysts, but at the end of the day, they are just simple traders who took a job with a bank because they couldn't make it on their own.

No news is good or bad today. All the market is interested in is tomorrow's EU summit and the verbal diarrhea that comes out of the EZ leaders' mouths during and after the first day's meetings.

Portugese PM just said "There's no reason to raise expectations too high for tomorrow's EU summit."

lol @ verbal diarrhea

hopefully it will be bearshit instead of bullshit

It is necessarry to call things with their true names from time to time. Propaganda is trying to cover the truth in spin of words and calls it press conference, but we know.

T

http://i.ytimg.com/vi/TlWrg1DZeeo/0.jpg

hi guys, i hope your making lots of pips. I have been busy trading and teaching so have had no time to visit these rooms.All my trades have ceased g/u and e/u but i am waiting for dow to drop to my trigger , no idea when that will be ' take care all

10 pip is way too much for me - it's my usual profit target probably I need to sign for fxcm demo for price inspection...

Euro is FUBAR

Look at the chart board. All risk assets are up and Euro is down across the board... and that's before the EU summit. Imagine it after the major disappointment that we're sure to get tomorrow and Friday.

Of course anything is possible but I trade based on probabilities... no possibilities

Soccernomics

http://hosting.fyleio.com/17735/publ...ctions-007.jpg



Soccer fans are only two games away from the Euro 2012 finals. Portugal and Spain play today while Italy will face the Germans on Thursday. The winner’s will play to claim the title of the “Best in Europe.”

It’s hard not to draw ironic parallels, as Thursday also marks the beginning of the EU summit to settle the economic score. The lay-up analogy was earlier in the week, when the “best” beat the “worst” as Germany topped Greece 4-2 to advance to the semi-finals.

If financial health translates to future soccer success, Germany should trounce Italy while Portugal and Spain will play an uninspired, poorly executed match that ends in a 0-0 tie.

While the US doesn’t compete in the Euro Soccer (truth be told, we’d get our butts kicked), we are the big player in the European financial game. In fact, the man of the match should be Ben Bernanke.

That’s right, because even though the US isn’t in this game, Ben Bernanke is the uber defender, stopper and goalie for all of Europe’s woes. Not only is the U.S. single largest source of money to the International Monetary Fund, we are the lender of last resort withcontinued dollar injections to the Eurozone.



Trade well and follow the trend, not the so-called “experts.”

Thanks To Larry Levin

GOALLLLLLLLLLLLLL !!!!!

Hi,

ECB chief economist Peter Praet suggested that the rate of the monetary institution could soon be lowered.

S.T

http://www.bloomberg.com/news/2012-0...-to-tread.html

Snippet:

ECB Liquidity

The deposit rate has served as the de facto benchmark, steering overnight market borrowing costs, since the ECB started to provide banks with unlimited liquidity after the collapse of Lehman Brothers Holdings Inc. in 2008. That policy removed the need for banks to borrow from each other to meet their reserve requirements, pushing down interest rates. The euro overnight index average, or Eonia, stood at 0.33 percent yesterday.

“If you want to ease monetary policy, you won’t get it from cutting the main refinancing rate,” said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. “Reducing it alone wouldn’t translate into lower market rates. Slashing the deposit rate makes more sense.”

The ECB isn’t the only central bank in Europe considering cutting interest rates below zero. Denmark’s central bank signaled last month that it is willing to let rates go negative to fight an appreciation of the krone, and the Swiss government has said it’s also assessing emergency measures such as negative rates to weaken the franc if Europe’s debt crisis escalates.
‘Costly Disruptions’

Other institutions have opted against such a move. The Fed started paying interest on deposits to help keep the federal funds rate near its target in October 2008 and has reimbursed banks with 0.25 percent on required and excess reserve balances since December that year.
Some Fed policy makers last August argued that reducing the rate could be helpful in easing financial conditions. While they discussed doing so in September, many expressed concern that such a move “risked costly disruptions to money markets and to the intermediation of credit,” the Fed said in minutes published on Oct. 12.

The Bank of Japan (8301) introduced a Complementary Deposit Facility in October 2008 to provide financial institutions with liquidity and stabilize markets, and has kept the interest it pays for the funds at 0.1 percent since then. Governor Masaaki Shirakawa told reporters on May 23 there would be “large demerits” to reducing the deposit rate because it could lead to a decline in money-market trading.
Encourage Lending

While the Bank of England cut its deposit rate to zero in March 2009, financial institutions that have a reserve account at the central bank don’t have an incentive to use the facility as all reserves are remunerated at the benchmark rate of 0.5 percent.

“If the ECB cut the deposit rate, it would take an important profit opportunity away from banks,” said Tobias Blattner, an economist at Daiwa Capital Markets Europe in London. By doing so, the ECB would also be “encouraging banks to lend to the real economy” even though “there’s hardly any demand for credit,” he said. Blattner predicts the ECB will cut its benchmark and leave the deposit rate at 0.25 percent.

ECB Executive Board member Benoit Coeure said on Feb. 19 that market interest rates of zero or lower “can result in a credit contraction.”
That’s because banks, trying to preserve their deposit bases by paying customers a reasonable interest rate, may reduce lending to companies and households because the return is too low and invest in higher-yielding assets instead.
Twin Benefits

The ECB has been examining the possible impact on markets of a deposit rate cut, helping to ease policy makers’ concerns, according to a euro-area official who asked not to be named because the deliberations are not public.

Callow said lowering the deposit rate would encourage banks in fiscally-sound countries like Germany, which are flush with excess cash, to lend to troubled banks on the euro-area periphery, which are dependent on ECB funding.

That would have the twin benefits of reducing banks’addiction to ECB funding and shrinking excess liquidity in the system.

“A deposit rate at zero will be of particular support to banks in southern Europe because it could help encourage some flow of credit,” said Callow. “A negative deposit rate can be damaging for money markets.”

Negative rates would destroy the business model for money-market funds, which would face the prospect of paying to invest, said Societe Generale economist Klaus Baader.
‘Twilight Zone’

European money-market funds totaled 1.1 trillion euros at the end of March, according data from Fitch Ratings Co.

“But the ECB doesn’t set policy to keep alive certain parts of the financial sector,” he said. “Policy makers want to show that they haven’t exhausted their options yet.”

Another consequence of an ECB deposit rate cut may be that some banks take advantage of a clause in the three-year loans allowing them to pay the money back after a year, which would reduce excess liquidity in the system.

That could be the basis for a compromise between the ECB and the Bundesbank, whose President Jens Weidmann has repeatedly warned of the risks related to too-generous liquidity provision, said Carsten Brzeski, senior economist at ING Group in Brussels.

“Reducing excess liquidity with a rate cut should sound rather interesting for the Bundesbank,” he said. “Maybe that’s the twilight zone where Draghi and Weidmann will meet.”

US Dollar vs Canadian Dollar: Another quiet evening with tight trading ranges ahead of the two day European Summit beginning tomorrow. USD/CAD is caught in the same tight ranges that are confining most currency pairs leading into the summit. Today the Oil Inventory will be released, an increase in supply would hurt the Loonie.
We expect a range today of 1.0225 to 1.0325

Canadian Dollar vs Euro: The Euro is unchanged at 1.2800 this morning as the market stands still before the EU summit. Some players are hopeful that there will be some sort of plan released to attack the debit situation. The likelihood of a solid plan that would ignite market confidence is very slim.

We expect a range today of 1.2775 to 1.2850

Canadian Dollar vs British Pound, Australian Dollar and New Zealand Dollar: Pound Sterling is slightly lower at 1.5970 as softer fundamental data eroded the little confidence in the Pound. The Australian Dollar has been contained within a 30 point range around 1.03 as little is happening in Asian markets. The New Zealand Dollar is unchanged at 0.8090 as markets wait for more information on the state of the world economy.

Data Releases
CAD: No data today
AUD: No data today
EUR: German Consumer Price Index
GBP: CBI Reported Sales
JPY: Retail Trade
NZD: Business Confidence
USD: Durable Goods