EurAnalysis

Short....Again.
added short @1.2557. No daily close higher than here in almost 2 months.

These are not full positions, all partials for cumulative effect for the good or the bad.
I only have a few more levels higher to partial short
.2660, .2750, and .2820

After that .3080 and .3150 have a few larger pendings waiting. If we get much higher than here before definitive fiscal union steps are taken, I will be moving to Europe as they have magical currency, and US dollar will be a$$et paper!

http://www.forexpros.com/news/forex-...on-hole-237616

Forexpros - The euro rose to session highs against the U.S. dollar and the yen on Tuesday, after the European Central Bank said its president Mario Draghi would be unable to attend the Federal Reserve’s annual Jackson Hole summit later this week.

During European late morning trade, the euro extended gains against the U.S. dollar, with EUR/USD rising 0.40% to 1.2548.

The ECB said Draghi would not be attending the Fed's annual summit meeting in Jackson Hole, Wyoming, due to his "heavy workload" in the next few days.

The unexpected announcement fuelled expectations that the ECB is working on policy measures to help stabilize the euro zone's sovereign debt markets, ahead of its next policy meeting on September 6.

The ECB president had been due to speak at the summit on Saturday, one day after a keenly anticipated speech by Fed Chairman Ben Bernanke.

Earlier Tuesday, Italy saw borrowing costs fall sharply at an auction of two-year government bonds.

Italy’s Treasury sold EUR3.0 billion of bonds maturing in May 2014, the top end of the targeted range, at an average yield of 3.06%, down from 4.86% at a similar auction last month.

The euro was trading close to a six-week high against the yen, with EUR/JPY up 0.30% to 98.70, but remained little changed against the Swiss franc, with EUR/CHF edging up 0.01% to 1.2010.

The single currency advanced to a three-week high against the pound, with EUR/GBP rising 0.39% to 0.7944.

The shared currency was broadly higher against the Australian, Canadian and New Zealand dollars, with EUR/AUD up 0.29% to 1.2089, EUR/CAD adding 0.19% to trade at 1.2406 and EUR/NZD climbing 0.47% to 1.5526.

Later in the day, the U.S. was to release a report on consumer confidence, as well as industry data on house price inflation.

...I would throw a dry board eraser at somebody.[/quote]
..sure brings back memories if school days

Its a 2560 party whats your TP?

I'm not looking for a great amount of pips, still too bullish, I don't think it will come down very much unless it decides to double top here instead of at 2590/00

2538 is a good TP for me, then i'll see

H1

BTW- Good morning from the west side of the Atlantic ocean!

U on the east coast GP?

The Daily Forex Brief is written by FxPro's team in the City of London.

Visit fxpro.co.uk for more news, FX commentaries, FxPro TV, real-time feeds, calculators and tools.

Daily Forex Brief

London: Tuesday 28th August 2012

The last line in the sand?The eurozone crisis has had its fair share of lines in the sand, not to mention 'make or break' summits of EU leaders. The mid-October meeting is now turning into one of those red line scenarios, with the timing of the latest troika mission to Greece (starting early September) reinforcing the growing feeling that continuing with more support for Greece and more slippage of the country's targets and reforms cannot continue. But the problem is that EU leaders have not or cannot agree on the alternative and Greece knows it. What does this mean for FX and the single currency? As liquidity returns to markets in September, it's likely that we are going to see another period during which FX markets struggle for sustained direction. The better tone to the euro, not only vs. the dollar, but also on the crosses, may have further to run but it's sitting uncomfortably with some longer-term bearish views.
http://webr.emv2.com/fxpro/fxpro-newDB.gifhttp://webr.emv2.com/fxpro/daily-briefDB.gifhttp://webr.emv2.com/fxpro/marketnewsDB.gifhttp://www.fxpro.com/sites/default/f...rf%2024h_0.png

My intraday 1st target is 1.2485-Today's POC, second target is where we bounced from at 1.2460/65 near the former naked POC and my scalp maximum gain of 100 pip target.

I just did. Sry CMan, but your posts keep on disturbing me from the posts which are actually helpfull. You post like 10-20% of usefull links and the rest is pure spam. When I spam, i am trying at least to be funny, but you are only annoying. It is not personal, I just want to read something what is usefull, and not the kindergarten crap. Blah blah leverage, blah blah patience, blah blah money flow, blah blah money management. Blah ignore.

T

From Gains, Pains & Capital this morning sent to me via email.

August 28, 2012

Four Reasons Why The Fed Will Not Announce QE 3 This Friday

The biggest even this week is Ben Bernanke's Jackson Hole Speech which will take place on Friday August 31. It was at Jackson Hole in 2010 that Bernanke hinted at QE 2. With that in mind, many investors believe that the Fed is about to unveil or at least hint at a similar large-scale monetary program this Friday.

We, at Phoenix Capital Research, disagree for three reasons. Number one, stocks are at or near four-year highs. With stocks at these levels, there is little reason for the Fed to use up any of its remaining ammunition.

Secondly, food prices are soaring due to the worst drought in 56 years. Some 63% of the lower US 48 states are experiencing a drought. As a result of this, the USDA has said that 50% of the US's corn crop will be in poor to very poor condition. Soybeans are in similar shape.

Thirdly, gas prices are near their all time highs.

As far back as May 2011, Ben Bernanke admitted publicly that the consequences of QE (higher food and energy costs) were outweighing the benefits (higher stock prices).

With stocks where they are today and food and energy prices where they are today, there is little reason for the Fed to unleash QE 3 or any large monetary program. Indeed, if the Fed were to do so, it would most assuredly cost Obama the election as the ensuing inflationary pressure would hit voters' pocketbooks.

With the election less than 100 days away and Mitt Romney and the GOP increasingly targeting the Fed and specifically Bernanke as a problem, the Fed isn't going to do anything that could risk Obama losing his bid for re-election. This is especially true given that there really isn't a sound argument for more QE at this time: food prices, energy prices, and stocks are high, while interest rates are at or near all time lows.

There is a fourth and final reason why QE is not in the cards. QE is a policy through which the Fed prints money to buy Treasury or Agency debt from the banks. The problem with this is that these bonds are the senior most assets that the banks use to backstop their trading portfolios.

In the case of the TBTFs, these banks only have $7 trillion in assets back-stopping over $200 trillion in derivative trades. The last thing these banks want is to swap out their senior most assets (Treasuries and Agency bonds) for more cash (remember the banks are already sitting on over $1 trillion in cash in excess of their required reserves).

In simple terms, the banks don't want cash. They want bonds, which they can use to leverage up their trading portfolios: their primary source of revenue with interest rates at or near zero.

Indeed, Bernanke has all but admitted this recently, saying "I assume there is a theoretical limit on QE as the Fed can only buy TSYs and Agencies... If the Fed owned too much TSYs and Agencies it would hurt the market."

Why would it hurt the market? Because the banks NEED assets/collateral. And QE takes this out of the system.

For this reason, we believe it is highly unlikely the Fed will announce QE at this time. There really is no reason for it to do especially since QE would in fact hurt the big banks: the very institutions the Fed has been trying to prop up.

We can all drop it now. Hope you don't have to reply CurrencyMan. It's kind of distracting.

Maybe so....butt don't they all look the same when you turn them upside down?

We're in the same boat neighbour
1.2525 should be a good support as it is the 38.2% from today's low and R2, I will be taking partial profit here.

I agree wholeheartedly with this article.

August 28, 2012


To print or not to print? Odds are that Fed Chairman Bernanke has been contemplating this question while drafting his upcoming Jackson Hole speech. The one good thing about policy makers worldwide is that they may be fairly predictable. As such, we present our crystal ball as to what the Fed might be up to next, and what the implications may be for the U.S. dollar and gold. http://www.merkfunds.com/images/2012...t-cartoon2.jpg

First off, we may be exaggerating: on process rather than substance, though. That is, Bernanke isn’t just thinking about whether to print or not to print as he is sitting down to draft his speech. Instead, he considers himself a student of the Great Depression and has been pondering policy responses to a credit bust for some time. Consider the following:

1. Bernanke has argued that going off the gold standard during the Great Depression helped the U.S. recover faster from the Great Depression than countries that held on to the gold standard for longer.
   1. Bernanke is correct: subject to many risks, debasing a currency (which going off the gold standard was) can boost nominal growth. Think of it this way: if the government takes your purchasing power away, you have a greater incentive to work. Not exactly the mandate of a central bank, though.

2. 1. Note by the way that by implication, countries that hold on to the gold standard invite a lot of pain, but have stronger currencies. Fast forward to today and compare the U.S. to Europe. While neither country is on the gold standard, the Federal Reserve’s balance sheet has increased more in percentage terms than that of the European Central Bank since the onset of the financial crisis. Using a central bank’s balance sheet as a proxy for the amount of money that has been “printed”, it shouldn’t be all that surprising that the Eurozone experiences substantial pain, but the Euro has been comparatively resilient.

3. 1. Possibly the most important implication: Bernanke considers the value of the U.S. dollar a monetary policy tool. When we have argued in the past that Bernanke might be actively working to weaken the U.S. dollar, it is because of comments such as this one. This is obviously our interpretation of his comments; a central banker rarely says that their currency is too strong, although such comments have increasingly been made by central bankers around the world as those pursuing sounder monetary policy have their economies suffer from competitive devaluations elsewhere.

1. Bernanke has argued that one of the biggest mistakes during the Great Depression was that monetary policy was tightened too early. Here’s the problem: in a credit bust, central banks try to stem against the flow. If market forces were to play out, the washout would be severe and swift. Those in favor of central bank intervention argue that it would be too painful and that more businesses than needed would fail, the hardship imposed on the people is too much. Those against central bank intervention point out that creative destruction is what makes capitalism work; the faster the adjustment is, even if extremely painful, the better, as the recovery is healthier and stronger.

2. 1. If the policy choice is to react to a credit bust with accommodative monetary policy, fighting market forces, and then such accommodation is removed too early, the “progress” achieved may be rapidly undone.

3. 1. We are faced with the same challenge today: if monetary accommodation were removed at this stage (interest rates raised, liquidity mopped up), there’s a risk that the economy plunges right back down into recession, if not a deflationary spiral. As such, when Bernanke claimed the Fed could raise rates in 15 minutes, we think it is a mere theoretical possibility. In fact, we believe that the framework in which the Fed is thinking, it must err on the side of inflation.

Of course no central banker in office would likely ever agree with the assessment that the Fed might want to err on the side of inflation. But consider the most recent FOMC minutes that read:

1. An extension [of a commitment to keep interest rates low] might be particularly effective if done in conjunction with a statement indicating that a highly accommodative stance of monetary policy was likely to be maintained even as the recovery progressed

As the FOMC minutes were released three weeks after the FOMC meeting, many pundits dismissed them as “stale”; after all, the economy had somewhat improved since the meeting. Indeed, it wasn’t just pundits: some more hawkish Fed officials promoted that view as well. But to make clear who is calling the shots, Bernanke wrote in a letter dated August 22 (the same date the FOMC minutes were released) to California Republican Darrell Issa, the chairman of the House Oversight and Government Reform Committee: “There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.” Various news organizations credited the faltering of an incipient U.S. dollar rally on August 24 with the publication of this Bernanke letter.

For good order’s sake, we should clarify that the Fed doesn’t actually print money. Indeed, printing physical currency is not considered very effective; instead, liquidity is injected into the banking system: the Fed increases the credit balances of financial institutions in accounts held with the Fed in return for buying securities from them. Because of fractional reserve banking rules, the ‘liquidity’ provided through this action can lead to a high multiple in loans. In practice, one of the frustrations of the Fed has been that loan growth has not been boosted as much as the Fed would have hoped. When we, and Bernanke himself for that matter, have referred to the Fed’s “printing press” in this context, referring to money that has been “printed”, it’s the growth in the balance sheet at the Federal Reserve. That’s because the Fed’s resources are not constrained; it’s simply an accounting entry to pay for a security purchased; that security is now on the Fed’s balance sheet, hence the ‘growth’ in the Fed’s balance sheet.

Frankly, we are not too concerned about the environment we are in. At least not as concerned as we are about the environment we might be in down the road: that’s because we simply don’t see how all the liquidity can be mopped up in a timely manner when needed. At some point, some of this money is going to ‘stick’. Even if Bernanke wanted to, we very much doubt he could raise rates in 15 minutes. To us, it means the time for investors to act may be now. However, talking with both existing and former Fed officials, they don’t seem terribly concerned about this risk. Then again Fed officials have rarely been accused of being too far sighted. We are concerned because just a little bit of tightening has a much bigger effect in an economy that is highly leveraged. Importantly, we don’t need the Fed to tighten: as the sharp selloff in the bond market earlier this year (and the recent more benign selloff) have shown, as soon as the market prices in a recovery, headwinds to economic activity increase as bond yields are rising. That’s why Bernanke emphasizes “communication strategy”, amongst others, to tell investors not to worry, rates will stay low for an extended period. This dance might get ever more challenging.

In some ways, Bernanke is an open book. In his ‘helicopter Ben’ speech a decade ago, he laid out the tools he would employ when faced with a collapse in aggregate demand (the credit bust we have had). He has deployed just about all tools from his toolbox, except for the purchase of foreign government bonds; recently, he shed cold water on that politically dicey option. Then two years ago, in Jackson Hole, Bernanke provided an update, specifying three options:

1. To expand the Fed’s holdings of longer-term securities
2. To ease financial conditions through communications
3. To lower the interest rate the Fed pays on bank reserves to possibly 10 basis points or zero.

We have not seen the third option implemented, but the Fed might be discouraged from the experience at the European Central Bank: cutting rates too close to zero might discourage intra-bank lending and cause havoc in the money markets.


As such, expect Bernanke to give an update on his toolbox in Jackson Hole. The stakes are high as even doves at the Fed believe further easing might not be all that effective and could possibly cause more side effects (read: inflation). As such, we expect him to provide a framework as to why and how the Fed might be acting, and why we should trust the Fed that it won’t allow inflation to become a problem. For investors that aren’t quite as confident that the Fed can pull things off without inducing inflation, they may want to consider adding gold or a managed basket of currencies to mitigate the risk to the purchasing power of the U.S. dollar.

Axel Merk


President and Chief Investment Officer, Merk Investments
Merk Investments, Manager of the Merk Funds

*DJ ECB Drains EUR209B In Weekly Deposit Auction, As Planned

Posted on 28 August 2012 7:00 | Dow Jones Newswires

28 Aug 2012 07:00 EDT *DJ ECB Receives EUR452.9 Bln In Bids At Deposit Auction

28 Aug 2012 07:00 EDT *DJ ECB Sets 1-Wk Deposit Auction Marginal Lending Rate At 0.01%

28 Aug 2012 07:00 EDT *DJ ECB Accepts 53.21% Of Bids At Marginal Rate

28 Aug 2012 07:01 EDT *DJ ECB: Weighted Average Rate At Deposit Auction Was 0.01%

(END) Dow Jones Newswires
August 28, 2012 07:01 ET (11:01 GMT)


DJ UPDATE: Depositors of All Stripes Yank Money from Spanish Banks

Posted on 28 August 2012 6:55 | Dow Jones Newswires

-- Spanish bank deposits fall by biggest amount since records began
-- Italian deposits drop marginally, Greece sees first increase since March
-- Institutional investors turn backs on Spain

(Adds data, background from second paragraph.)

By Todd Buell
Individuals, companies and investment funds yanked money out of Spanish banks by a record amount in July, according to data released by the European Central Bank Tuesday.

Deposits in Spanish banks dropped 4.7% in July versus June to 1.51 trillion euros ($1.89 trillion). The nearly EUR75 billion decline was the sharpest monthly drop in Spain since the ECB started keeping such data in 1997.
In contrast, deposits in Italian banks slid 0.02%, while in Greece, deposits rose by almost 2%, the first increase since March. Germany and France recorded 0.2% increases in deposits.

Spanish banks sold EUR7.6 billion of government bonds in July, the data showed.

About half of the outflow from households and companies was due to seasonal factors, a Bank of Spain official told Dow Jones Newswires. Companies typically pay taxes in July, while households tend to spend more in the summer as they go on holiday, he said.

Still, the data suggest that the uncertainty over Spain's ability to manage its finances has grown to the extent where depositors increasingly believe they need to act to protect their savings. In June, the European Union agreed to give Spain a bailout of up to EUR100 billion for its banking sector. The collapse of a housing boom has left almost one in four members of the work force without a job.

The country is under increasing pressure to tap euro-zone bailout funds for a full-scale program, which could bring down its borrowing costs. ECB President Mario Draghi said the ECB was prepared to buy the bonds of euro-zone states on the secondary market, provided the states were in a bailout program.

Tuesday's data showed that about two-thirds of the total withdrawal was from investment and securitization funds that were not renewed, meaning fund managers had to repay investors by withdrawing deposits.
The outflow doesn't imply additional funding needs for the banking system, the official said.

Write to Todd Buell at [email protected] and Christopher Bjork at [email protected]

Twitter: @ToddBuell
(END) Dow Jones Newswires
August 28, 2012 06:55 ET (10:55 GMT)

Smoky Mountains of Tennessee.

Attention all posters.

I started a new thread 5 minutes ago.

It is called EurAnalysis Kindergarten.

If anyone wants to post anything educational, that is where you should post it and then just post a link to it in this thread. This ensures that the bulk of the content in this thread is related to trading and not education.

It is still a thread for all of us to share and learn, but I am starting to see far too many instances where the seasoned posters here are asked to repeat themselves too many times. If the information were posted in EurAnalysis Kindergarten, then all one would have to do is refer the poster who is asking to that thread instead of taking the time to retype the information.

As this thread has grown both in popularity and in the number of active posters, I feel that this is a solution we should at least try.

Who's with me?