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EurAnalysis Kindergarten 24 replies

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  • #40,481
  • Edited 1:23am Jun 29, 2012 12:56am | Edited 1:23am
Good morning everyone

I hope none of you have been grievously injured by Van Rompuy's verbal diarrhea. Never underestimate the power of a short covering rally. Nobody actually had to buy the Euro to cause this. All they had to do was close their sell positions. Impressive isn't it? Personally I am very pleased because my E/U sell limit orders got triggered and my U/CAD buy limit order also got triggered.

Now let's look at what has changed to cause this and what the implications are. Honestly I have not fully digested what is happening yet, but from my initial view of things, I have surmised the following...

1. The EFSF/ESM will be allowed to recapitalize banks directly once a banking monitor is set up. Such banking monitor is supposed to be the ECB.

2. Struggling EZ nations will also have access to EFSF/ESM funds to fund themselves when the market does not have the appetite to do so at reasonable rates.

Wow, is that it? Yep that's it. So why such an impact? Well that's because it has long term implications for EuroZone debt finance. If the banks are strong and have access to recap funds, plus the nations are virtually guaranteed a second source of funds in case the market doesn't feel up to funding them, that keeps the bond yields lower than they have been in the last few weeks.

Now let's keep in mind that details are still sketchy and Merkel left the summit without making any comment. I have seen this a few times in the past. Van Rompuy and Barosso both have a habit of making things sound like they are a done deal when in fact there is no consensus. Just because a majority of EU leaders have agreed, it does not make it a deal. In Europe, only one nation has to disagree and the deal is dead.

Before deciding which way this puppy is going, I want to hear from Frau Merkel.

Regardless of what happens and how this deal works out, I am not willing to speculate that we will get another wave of bullish moves. In fact I highly suspect that this move will be faded today. The summit is over so the risk event is behind us. Now it's just a matter of one negative comment from Merkel or Schauble and the bears will jump right back in.

HINT: Keep your eyes on the EZ 10 year bond yields. Spain in particular.

So... I'm waiting

E/U H4
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Those who say it cannot be done should not interrupt those who are doing it
  • #40,482
  • Jun 29, 2012 12:56am Jun 29, 2012 12:56am
Quoting Desouza
I was not expecting nor was I prepared for a move like this. It went through all three entry and stop orders I had all the way to 1.2600

I'm not usually surprised by moves in the market but 1.2600 in a split second???? I'm using FXCM and my orders got executed before any of the alerts I had in place made a sound. I went for juice in the fridge come on

I got clobbered, and now i'm left with one short position that i hope will help me recover. might as well become more of a position trader I'm gonna take a walk.

Can someone tell me who...
There was buy stop from 1.2550 through 1.2600

therefore, never ever place a sell limit when you know there are buy stop.

1.2620-1.2600 zone relatively safe, although many thinks that it will never be hit, especially during asian a blast from 1.2450-1.2620 is crazy.

just look at volume, think the amount being loaded.

1.2440 area was masssively entered by some banks. ACB?

Also, triple bottom. 1.2440 zone, 1.2450, 1.2410. we should look at 1.2570-1.2680 meanwhile.

However, europe is known for selling for the past few days, alike yesterday, 1.2520 into 1.2408, so lets see what europe brings.
  • #40,483
  • Jun 29, 2012 12:59am Jun 29, 2012 12:59am
we have 101.xx on the e/j and 1.26xx on the e/u.

can we push through both on the frankfort open?
  • #40,484
  • Jun 29, 2012 1:01am Jun 29, 2012 1:01am
Attached Image
Those who say it cannot be done should not interrupt those who are doing it
  • #40,485
  • Jun 29, 2012 1:27am Jun 29, 2012 1:27am
Today's Euro-FX Option expiries at 14:00 GMT

1.2725
1.2600
1.2550
1.2500
1.2400
Those who say it cannot be done should not interrupt those who are doing it
  • #40,486
  • Jun 29, 2012 1:32am Jun 29, 2012 1:32am
No Sarkozy:
It was the first policy-making summit that Merkel faced without France’s Nicolas Sarkozy as her crisis-fighting partner.
Instead, new French President Francois Hollande led a rebellion against Germany’s austerity-first prescriptions with calls for immediate relief for hard-hit countries. He put French backing of a German-inspired deficit-control treaty on hold, and Italy and Spain withheld approval of a 120 billion-euro ($149 billion) growth-boosting package until Germany authorized steps to calm their bond markets.
http://www.bloomberg.com/news/2012-0...-retreats.html
Bulls Run. Bears Bite. We Profit.
  • #40,487
  • Edited 3:11am Jun 29, 2012 1:35am | Edited 3:11am
That's it. So what do we really have? Nothing.


"We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present Proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these Proposals as a matter of urgency by the end of 2012. When an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly. This would rely on appropriate conditionality, including compliance with state aid rules, which should be institution-specific, sector-specific or economy-wide and would be formalised in a Memorandum of Understanding. The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.

We urge the rapid conclusion of the Memorandum of Understanding attached to the financial support to Spain for recapitalisation of its banking sector. We reaffirm that the financial assistance will be provided by the EFSF until the ESM becomes available, and that it will then be transferred to the ESM, without gaining seniority status.

We affirm our strong commitment to do what is necessary to ensure the financial stability of the euro area, in particular by using the existing EFSF/ESM instruments in a flexible and efficient manner in order to stabilise markets for Member States respecting their Country Specific Recommendations and their other commitments including their respective timelines, under the European Semester, the Stability and Growth Pact and the Macroeconomic Imbalances Procedure. These conditions should be reflected in a Memorandum of Understanding. We welcome that the ECB has agreed to serve as an agent to EFSF/ESM in conducting market operations in an effective and efficient manner.

We task the Eurogroup to implement these decisions by 9 July

Attached File(s)
File Type: pdf EuSummit20120629.pdf   17 KB | 184 downloads
Those who say it cannot be done should not interrupt those who are doing it
  • #40,488
  • Jun 29, 2012 1:36am Jun 29, 2012 1:36am
Quoting 5percent
There was buy stop from 1.2550 through 1.2600

therefore, never ever place a sell limit when you know there are buy stop.

.
Gotcha

I grab back a few pips on the retracement (scalp on 5m/15min TF). I still have one short major in play. I moved my stop to 1.2620. I should recover nicely

thanks

PS, Raided my liquor cabinet
  • #40,489
  • Jun 29, 2012 1:37am Jun 29, 2012 1:37am
spikes @ 1.2620
resistance felt at 1.2609, any entry along this line is safer. Even if the price go higher, can place at next resistance.

price will test resistance again @ 1.2609 likely, failure to break may run market for some retracement, but on 4hour its not overbought yet!.

1 hour chart has good, bullishness with RSI @ 75-79, overbought temporary. Quick sell scalp 1.2609-1.2690 is fine.

Won't be surprise that market panic may send this higher or either just selling off again.

The playout in europe is important, if its continue a buy, it may reach 1.2650.

If selling stop loss are hit or sell orders are removed from market, price may reach higher.

As its a friday, anything can happen, don't be over-optimistic about this price.
  • #40,490
  • Jun 29, 2012 1:41am Jun 29, 2012 1:41am
Quoting PipTrapper
Good morning everyone

I hope none of you have been grievously injured by Van Rompuy's verbal diarrhea. Never underestimate the power of a short covering rally. Nobody actually had to buy the Euro to cause this. All they had to do was close their sell positions. Impressive isn't it? Personally I am very pleased because my E/U sell limit orders got triggered and my U/CAD buy limit order also got triggered.

Now let's look at what has changed to cause this and what the implications are. Honestly I have not fully digested what is happening yet, but...

That spike helped me to get my weekly target and able to withdrew the profit. take profit hit for buy from 1.2424 but then it further went away 100 + pips.

Am not bothered and not having any position just enjoyed a good week and want to have a happy week-end.

Now a days am only able to trade for late US Session so very less Trading from my part but just want keep the slow pace going.

Enjoy the friday ... all
  • #40,491
  • Jun 29, 2012 1:44am Jun 29, 2012 1:44am
Quoting 5percent
spikes @ 1.2620
resistance felt at 1.2609, any entry along this line is safer. Even if the price go higher, can place at next resistance.

price will test resistance again @ 1.2609 likely, failure to break may run market for some retracement, but on 4hour its not overbought yet!.

1 hour chart has good, bullishness with RSI @ 75-79, overbought temporary. Quick sell scalp 1.2609-1.2690 is fine.

Won't be surprise that market panic may send this higher or either just selling off again.

The playout in europe is important, if its continue...
Good points. Also remember that today is month end and quarter end so expect some volatility later with capital flows as funds re-balance their portfolios and book profits (or losses)
Those who say it cannot be done should not interrupt those who are doing it
  • #40,492
  • Jun 29, 2012 1:45am Jun 29, 2012 1:45am
Quoting rekon67
That spike helped me to get my weekly target and able to withdrew the profit. take profit hit for buy from 1.2424 but then it further went away 100 + pips.

Am not bothered and not having any position just enjoyed a good week and want to have a happy week-end.

Now a days am only able to trade for late US Session so very less Trading from my part but just want keep the slow pace going.

Enjoy the friday ... all
Ahh Rekon is finally back
I hope your travels were exciting.
Congrats on the positive pips from your 1.2424 buy
Those who say it cannot be done should not interrupt those who are doing it
  • #40,493
  • Jun 29, 2012 1:46am Jun 29, 2012 1:46am
Quoting rekon67
That spike helped me to get my weekly target and able to withdrew the profit. take profit hit for buy from 1.2424 but then it further went away 100 + pips.

Am not bothered and not having any position just enjoyed a good week and want to have a happy week-end.

Now a days am only able to trade for late US Session so very less Trading from my part but just want keep the slow pace going.

Enjoy the friday ... all
nice, me too, woke up to see a Friday surprise gift.

What i learned from this kind of summit is usually bearish, followed by a surprise bull steam, remembered when january 2012, price @ 1.2626, market reversed sharply there, and that's what i anticipated of this price now.

problem -> market sells off -> drama -> meeting -> Temporary solutions -> Market rally.

the cycle repeats over and over again.



However, i am not bullish-bias on the summit, i will continue to buy @ support and sell @ resistance line.
  • #40,494
  • Jun 29, 2012 1:52am Jun 29, 2012 1:52am
Quoting Tyoon
Some tech on DX risk.

http://www.forexfactory.com/attachme...1&d=1340310822
Quoting PipTrapper
The DX didn't seem to care about the other 3 supply zones below this one.

Extreme sentiment in markets doesn't really care about technicals.
True, also depends how you define supply and demand.

..
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  • #40,495
  • Jun 29, 2012 1:54am Jun 29, 2012 1:54am
Quoting 5percent
nice, me too, woke up to see a Friday surprise gift.

What i learned from this kind of summit is usually bearish, followed by a surprise bull steam, remembered when january 2012, price @ 1.2626, market reversed sharply there, and that's what i anticipated of this price now.

problem -> market sells off -> drama -> meeting -> Temporary solutions -> Market rally.

the cycle repeats over and over again.



However, i am not bullish-bias on the summit, i will continue to buy @ support and sell @ resistance line.
gr8! I am expecting this bull rally continue for some more time and really not like to jump for Sale positions.
  • #40,496
  • Jun 29, 2012 1:58am Jun 29, 2012 1:58am
Well that bit of fantastic news smashed through my two pending sell orders at 2527 and 2584 whilst i slept.

Oh Well at least i am getting a better price to sell at.

because i believe nothings changed

selling at 2590 SL at 2630 TP ?
  • #40,497
  • Jun 29, 2012 2:00am Jun 29, 2012 2:00am
Today’s orderboard

Written by Pete Jackson
June 29, 2012 at 06:54 GMT

EUR/USD: Bids 1.2550/60 sell stops below ahead of bids 1.2500/10. Offers 1.2630/50

GBP/USD: Offers 1.5640/60, likely buy stops above, ahead of larger offers 1.5725/35 and 200 day MA at 1.5750. Bids 1.5600/10, tech supp 1.5570/80

EUR/GBP: Offers 0.8080/90, Bids 0.8030/35, tech supp 0.8010/15 (o/n lows) ahead of bids 0.7990/00, barriers below at 0.79.50 and 79.00, large sell stops through both

USD/JPY: Offers from 79.80/00 from exporters, sovereigns, CTA’s. Bids from 79.20 layered down to 79.00 (rumoured semi-official), sell stops through 79.00 ahead of bids 78.65/75.

EUR/JPY: Bids 99.65/75, sell stops through 99.50, offers 100.20/30 and 100.50/60, larger up at 101.00/10

AUD/JPY: Tech supp 80.22 (55 day MA), Bids 79.35/45, Offers 81.00/10 and tech res 81.50/60

EUR/CHF: Bids 1.2000/10(SNB), Offers 1.2025/50 buy stops through 1.2055

AUD/USD: Bids 1.0125/35, 1.0050/60(1.0055 – 55 day MA). Offers /tech res 1.0215/25 (1.0225 June 20 high), tech res above 1.0245/50 (200 day MA 1.0248) , buy stops above

EUR/AUD: Offers 1.2420/40, Tech supp 1.2320/25 and larger at 1.2280/85 (March 5 lows),

NZD/USD: Tech support 200 day MA at 0.7945, offers 0.7990/00 and 0.8010/20
Those who say it cannot be done should not interrupt those who are doing it
  • #40,498
  • Jun 29, 2012 2:02am Jun 29, 2012 2:02am
Quoting Prosac_100Mg
Well that bit of fantastic news smashed through my two pending sell orders at 2527 and 2584 whilst i slept.

Oh Well at least i am getting a better price to sell at.

because i believe nothings changed

selling at 2590 SL at 2630 TP ?
Probably not the best of ideas to add short positions until after the London and NY sessions have had their hopiumized fun. Just sayin'... Obviously you know best....
Those who say it cannot be done should not interrupt those who are doing it
  • #40,499
  • Jun 29, 2012 2:12am Jun 29, 2012 2:12am
Quoting PipTrapper
Probably not the best of ideas to add short positions until after the London and NY sessions have had their hopiumized fun. Just sayin'... Obviously you know best....
Very true. If you must short keep your stop loss 5 pips or less. Buyers are coming forward like a drug users would to a crack cart in a rehab center
  • #40,500
  • Jun 29, 2012 2:16am Jun 29, 2012 2:16am
Wow. Talk about concerted effort from the global leaders to 'normalize' things. These are huge swings.. Can imagine lots made big bucks or lost big bucks.
I am lucky to be even atm
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