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  • #261
  • Jul 13, 2012 1:29am Jul 13, 2012 1:29am
Quoting Esssex
This thread is maturing really well.

As a fundie boy, I am still cutting any mid to long term exposure to the EUR/USD pair and I still highly recommend people hopping on board the sell EUR against any risk currency trade.

Fundie trade of the day, added more shorts to EUR/AUD and EUR/NZD after forecast Chinese numbers to take full advantage of the weak EUR and money flow by investors to seek higher I/R returns.

After bad AUD numbers yesterday that caused a much needed AUD selloff by the markets, I was waiting for the Chinese numbers to give...

morning,

I completely understand what you are saying and have been looking at EURAUD this week with a view to entry, but from a technical view no matter what timeframe I look at it screams out that is over extended right now.

Of course that does not mean it won't continue down, but entering shorts at these levels goes against all the trading style that I use
  • #262
  • Jul 13, 2012 1:41am Jul 13, 2012 1:41am
Quoting C5fx
My fundies are weak, I trade technicals almost exclusively with the exception of big news events like NFP and the like. I'm trying to expand my horizons! Could you explain to me how/why Chinese fundamentals affect foreign currency pairs and their correlations?
You would have to look at the major trading partners of the particular country as well as the key driver of their economy.

So in the case of Australia, they rely on their exports for growth,

Australia exports roughly 24% of their goods to China and 16% to Japan. In fact they export about 70% of their goods to Asia. So their performance is very much based upon the performance of Asian economies for growth.

They have limited exposure to the US and EU hence the economic climate there doesn't directly impact Australia, though it will impact China to an extent but by how much, would require you to look at the Chinese economic policy. You can gauge the US's situation roughly by looking at Chinese GDP numbers, a slowing China usually means the US is importing less Chinese goods and they are not doing well.

NZD's major trading partner is AUD, so a better AUD is always better for the NZD.
  • #263
  • Edited 2:25am Jul 13, 2012 1:45am | Edited 2:25am
European Session Outlook

I am still looking for a relief bounce... even a dead cat bounce to get to higher, more desirable levels from which to re-enter short.

EURUSD itself has made a full 5 wave decline... and is in a logical place for a retrace. Yesterday I posted a chart of the S&P 500... a broad measure of risk trends that was sitting at a clear technical level that would give a more clear signal to the direction of EURUSD when compared to a EURUSD chart.

http://www.forexfactory.com/showthre...72#post5834872

Below is posted the S&P 500 as we gear up for Fridays European Session. Yesterday, we had a false breakout of the rising wedge and closed the daily with a candle formation that still shows indecision and hints at possible reversal at these levels. A hammer interpretation would signal reversal.... a Doji interpretation continued indecision.

Overnight, China GDP came in as expected... I don't trust any numbers coming out of China... Social unrest has been predicted if China's GDP falls below 7.5%, so they are hardly going to tell us the true number... nonetheless.. it was a number the market was waiting for to gauge the continuing risk of a global slowdown.

Assets across classes staged breakouts with little follow through yesterday, and today I will again be keeping my eye on the S&P500 chart, as it has the clearest technical pattern.

Farther downside in the EURUSD is possible... but to me the Risk/Reward of shorting at these levels isn't conducive to profitable positions. There are too many possible levels of support just below that will need some momentum behind price to get through, given the lengths we have already declined.

So it really comes down to a bad Risk/Reward scenario that leaves me on the sidelines waiting for a bounce to higher levels.... My profit targets are at least 50 pips... so I need a real move.

OR

some fundamental driver that will give the pair enough momentum to actually sustain a move that would be trade-able for me could materialize. Such a driver will be evident across asset classes.... carrying the S&P into a clear breakout (takes out yesterday's low). A fast money move into 2150 has some potential to trigger a new short...

Two things that are on the docket that could materialize into such fundamental drivers behind a fast money move would be Italy's auction today of its benchmark 10 year bonds. Bond yields have been very good as of late, so I don't put much hope in that. ***EDIT*** Actually they have blown out quite a lot since the Moody's downgrade with Italy above the key 6% level ***EDIT**** Also we will have earnings season heating up with key US banks JP Morgan and Wells Fargo reporting today.... big misses on earnings could get the S&P rolling into an accelerating sell off.... that's a more likely birth mother to the kind of move that would have me shorting before a bounce.

On the back burner, and unlikely to come to a boil today is the German High Courts ruling on direct bank recap via the ESM.... this has high impact potential, but its probably too early for a ruling.

News stories like the German court decision however need to be kept in mind. It isn't that I enter a trade based on breaking news... its that the context derived by understanding the news informs me as to the momentum that is likely to be behind a technical break that follows from a high impact news release. There is more to this market than just a chart of the EURUSD.... sometimes just a EURUSD chart provides a clear enough picture... but often other charts of other markets, and being aware of the fundamentals that are behind the moves through technical levels gives a clearer picture and provides much needed context to the technicals.
Attached Image (click to enlarge)
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  • #264
  • Jul 13, 2012 1:45am Jul 13, 2012 1:45am
Quoting MaxDoom
morning,

I completely understand what you are saying and have been looking at EURAUD this week with a view to entry, but from a technical view no matter what timeframe I look at it screams out that is over extended right now.

Of course that does not mean it won't continue down, but entering shorts at these levels goes against all the trading style that I use
Would be great if you could post some charts about them and good points to look at.

As I am still learning the technical parts from books, I find it hard to apply it to charts and could use some guidance.
  • #265
  • Jul 13, 2012 1:51am Jul 13, 2012 1:51am
Quoting Esssex
You would have to look at the major trading partners of the particular country as well as the key driver of their economy.

So in the case of Australia, they rely on their exports for growth,

Australia exports roughly 24% of their goods to China and 16% to Japan. In fact they export about 70% of their goods to Asia. So their performance is very much based upon the performance of Asian economies for growth.

They have limited exposure to the US and EU hence the economic climate there doesn't directly impact Australia, though it will impact...
This is great. Thanks a lot, Esssex. I love learning new things
  • #266
  • Jul 13, 2012 2:09am Jul 13, 2012 2:09am
Quoting Crassius
European Session Outlook

I am still looking for a relief bounce... even a dead cat bounce to get to higher, more desirable levels from which to re-enter short.
nice piece chap, earlier in the week I had the view that it need a retrace back to 1.240x to build a better foundation, now I would have to say maybe 1.233x as 1.24 is too far away, the damn thing is getting itself tightly wound up at the moment.

still until then I amshort EU Cable, crude and dax

but I will be looking carefully at any resistence points for signs of the start of retracement
  • #267
  • Jul 13, 2012 2:20am Jul 13, 2012 2:20am
Quoting MaxDoom
nice piece chap, earlier in the week I had the view that it need a retrace back to 1.240x to build a better foundation, now I would have to say maybe 1.233x as 1.24 is too far away, the damn thing is getting itself tightly wound up at the moment.

still until then I amshort EU Cable, crude and dax

but I will be looking carefully at any resistence points for signs of the start of retracement
Thanks. Yeah 2400... a fading hope....
  • #268
  • Jul 13, 2012 2:25am Jul 13, 2012 2:25am
this off the wire... withit being Friday and low volume anyway we could see 1.215x holding out today....

EURO-DOLLAR: Remains under pressure with recovery efforts remainingshallow and keeping downside in focus. Asian traders overnight mentionedthat option desks were seen as the main interest buyers, correcting therate off overnight lows of $1.2181. Rate currently trades around$1.2186. Further demand seen around Thursday's NY low at $1.2166, withdemand also noted between $1.2165/60 ahead of option barrier interest at$1.2150. Asian traders noted that an Asian sovereign has demandinterest into this level.
  • #269
  • Edited 6:54am Jul 13, 2012 3:36am | Edited 6:54am
Quoting Esssex
Would be great if you could post some charts about them and good points to look at.

As I am still learning the technical parts from books, I find it hard to apply it to charts and could use some guidance.
okay here are some views on the EURAUD but first you have to understand my style of trading.

I am not really an indicator type of trader however, I will sometimes use them to confirm an entry point, but I will only ever use an indicator if I understand the maths behind it - otherwise you don't really know what it is telling you.

I extensively use simple elliot wave and fib projections based upon recent swings. Don't be put off by that, because I literally mean ABC corrections and 5 wave trends I find it a reliable projection tool and helps keep me on the right side of a trade.

So to the EURAUD:

Monthly: we all know that it has crashed through an establish range going back forever, but consider first that it made a violent up swing above the range then bang back down and right through the bottom. Nothing lasts forever eh.

Any oscillating indicator will show you it is over-extended but those indicators become meaningless in a trend until it reaches a turning point - beware. And MAs are too slow for catching the beginning or end of a movement.

But if you look at the shape of the move you will see it becoming shallower and yes it follows a smooth form. An MA would paint a like line but wouldn't look forward hence the hand drawn. The price is also quite far from that line which indicates regression risk.

Weekly: same as monthly just more bars

Daily: We had a swing up from 1.217x to 1.302x ending 18th May. since then we are in a swing down that can no longer be a retrace because it exceeds the start of that swing up.

Taking a simple 5 wave trend projection you will see on the chart that is has blown through all the target clusters with just a single and rarely reached target line left.

Of course it can go further down even with my simple count, because what is showing as wave 3 at the moment could be wrong! we could still be in wave 3.
But remember I use this tool to project trade probability and I would have been getting in after I had painted wave 4 possible position so all the way back up there at 1.24xx somewhere and with it having blown through all the targets I would be looking for longs now.
For me to adjust this count I first need to see a new wave 4 form and that means upward movement, so not supportive of a short right now using this method. But if it happens I will make a new 5 wave projection and possibly trade it.

Hourly: Since the recent bottom the hourly has made a pullback and then a new dip is/has formed. After the initial big up bar the action has been very overlapping and as it comes off a low point I will assume it is a correction of the recent move down as a starting point (after all every pullback is a correction of some sorts).

So first I look at the move down from 1.209x 10th July and I can see that it has made a 78.2% retracement of this move and most corrections don't go much beyond that.

BUT is has also only completed a single push up not the very common ABC so I will look at the next high swing 1.243x 29th June and that shows us only a 23.6% retracement and that is normally a minimum for retracements.

Also now we are lower timeframed I can take a bit of meaning from the oscillator - in this case a stochastic which is telling me that the price is very low compared with the last X periods and looking at the stochastic it seems to be matching up reasonably with hi/los.

So at this time I run a speculative ABC calculation on the hourly and I get some targets printed above. Now all I need to do is confirm an entry...

A new low (confirmed by at least two hourly bars)
A supporting stochastic heading up and ideally low.

I might then refine my entry on a 15 minute chart off a low.


So is any of what I said fact - only the historic points this is about probability and projections of that probability. In reality the price could simply go on down, in which case I will keep making projections until it all falls into place then I have a trade.

Hope it is of use.
Attached Image(s) (click to enlarge)
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Click to Enlarge Name: EURAUD-sbDaily.png Size: 33 KB
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  • #270
  • Jul 13, 2012 3:38am Jul 13, 2012 3:38am
all my shorts are closed.

not trading anymore today likely to be slow and boring
  • #271
  • Edited 4:16am Jul 13, 2012 4:13am | Edited 4:16am
Italian 10 Year breaks through key 6% level ahead of auction results announcements.... bid tone across all markets...

Results in as I type... lowest Italian 3 yr since May... Good Bid to cover... 10 year is the benchmark... no results yet...

This auction was highly anticipated today as a clue to direction... looks like a bullish good auction... hope we go higher to place some new shorts
  • #272
  • Jul 13, 2012 4:22am Jul 13, 2012 4:22am
Quoting Esssex
You would have to look at the major trading partners of the particular country as well as the key driver of their economy.

So in the case of Australia, they rely on their exports for growth,

Australia exports roughly 24% of their goods to China and 16% to Japan. In fact they export about 70% of their goods to Asia. So their performance is very much based upon the performance of Asian economies for growth.

They have limited exposure to the US and EU hence the economic climate there doesn't directly impact Australia, though it will impact...
If there was easy money lying around,no one would be forcing it into your
  • #273
  • Jul 13, 2012 4:23am Jul 13, 2012 4:23am
Quoting Crassius
European Session Outlook

I am still looking for a relief bounce... even a dead cat bounce to get to higher, more desirable levels from which to re-enter short.

EURUSD itself has made a full 5 wave decline... and is in a logical place for a retrace. Yesterday I posted a chart of the S&P 500... a broad measure of risk trends that was sitting at a clear technical level that would give a more clear signal to the direction of EURUSD when compared to a EURUSD chart.

http://www.forexfactory.com/showthre...72#post5834872

Below...
If there was easy money lying around,no one would be forcing it into your
  • #274
  • Jul 13, 2012 4:31am Jul 13, 2012 4:31am
4H box
Waiting for NY breakout
prefer for sell
Attached Image (click to enlarge)
Click to Enlarge Name: EU.png Size: 24 KB
If there was easy money lying around,no one would be forcing it into your
  • #275
  • Jul 13, 2012 4:42am Jul 13, 2012 4:42am
Italian Ten Year yields back above the key 6% level... less than an hour after the much anticipated auction today..... Must have been a lot of official pressure to buy those bonds at the auction and artificially drive down the yields.... obviously the open market has almost instantly rejected the yields the auction produced.
  • #276
  • Jul 13, 2012 4:57am Jul 13, 2012 4:57am
Quoting Crassius
Italian Ten Year yields back above the key 6% level... less than an hour after the much anticipated auction today..... Must have been a lot of official pressure to buy those bonds at the auction and artificially drive down the yields.... obviously the open market has almost instantly rejected the yields the auction produced.

Good points....
There was only one very large bidder there today,
no prizes for guessing who.

Great thread you got here Tom.
You can remain irrational longer than you can remain solvent.
  • #277
  • Jul 13, 2012 5:32am Jul 13, 2012 5:32am
Quoting FXMindset
4H box
Waiting for NY breakout
prefer for sell
Always looking the GREAT, never left GOOD Point...
  • #278
  • Jul 13, 2012 5:33am Jul 13, 2012 5:33am
Quoting Tsar
If there was easy money lying around,no one would be forcing it into your
  • #279
  • Jul 13, 2012 5:38am Jul 13, 2012 5:38am
Quoting FXMindset
Miss you so.... much
Always looking the GREAT, never left GOOD Point...
  • #280
  • Jul 13, 2012 5:49am Jul 13, 2012 5:49am
Quoting Crassius
European Session Outlook

I am still looking for a relief bounce... even a dead cat bounce to get to higher, more desirable levels from which to re-enter short.

<<<<<<<<<<<<<SNIP SNIP SNIP>>>>>>>>>>>>>

Also we will have earnings season heating up with key US banks JP Morgan and Wells Fargo reporting today.... big misses on earnings could get the S&P rolling into an accelerating sell off.... that's a more likely birth mother to the kind of move that would have me shorting before a bounce.

S&P500 breaks above key resistance just ten minutes ahead of the release of JP Morgan's Q2 numbers....Good numbers ahead? I'm not taking any longs... looking to get short higher...
Attached Image (click to enlarge)
Click to Enlarge Name: 2012-07-13_S&PHourly.png Size: 12 KB
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