EurAnalysis

Online Chart: Reliable

http://www.netdania.com/Products/liv...Chart.aspx?m=c

Noooo. It was a scalp. Actually many scalps. Bought multiple positions between 1.2820 and 1.2830 and took profit at 1.2863

All opened and closed in just over 1 minute.

Daily Forex Brief

London: Wednesday 12th September 2012

Dollar decline gathers momentum

Ahead of today's critical decision from the German Constitutional Court, of interest is that the dollar's demise has continued to gather momentum. Despite some real trepidation regarding how the judges in Karlsruhe will rule, the single currency is now not that far away from the 1.29 level. To put the recent price action into perspective, the euro is now trading above the 200d moving average for the first time since late October 2011. Also, USD/JPY fell below 78.0 to a 7m low, cable is at a 4m high near 1.610 and the Aussie is just under 1.05. One rationale for the continued decline in the greenback rests with an expectation that the Fed will announce substantive QE tomorrow. Also worth noting is that in the aftermath of Mario Draghi's OMT announcement, Euro-denominated corporate bond issuance has suddenly taken off – on Monday, there were 11 deals priced worth at least EUR 500m, the highest for a single day since the inception of the single currency. In the first six sessions of the current month, some EUR 26bn of corporate bond deals have been priced up, and there is plenty more to come given investor appetite for yield and the fact that European securities markets have essentially been shut for the past half year. As international investors rush to participate, it is little wonder that the euro is rising rapidly and the dollar is weakening. One final nail in the coffin for the dollar was Moody's threat that it might lower America's debt rating if Congress fails to implement a comprehensive budget deal.
http://webr.emv2.com/fxpro/fxpro-newDB.gifhttp://webr.emv2.com/fxpro/daily-briefDB.gifhttp://www.fxpro.com/sites/default/f...rf%2024h_0.pngAlso in today's Daily Forex Brief:http://webr.emv2.com/fxpro/arrowDB.jpg What we can expect from the Fedhttp://webr.emv2.com/fxpro/arrowDB.jpg

http://www.actionforex.com/action-in...0120912174135/

Risk rally resumed on optimism that additional easing from US and China, following the OMT announcement from ECB last week. DOW breached 2012 high of 13338 overnight even though it didn't manage to close above there yet. Asian equities are broadly higher with Nikkei up over 130 pts while HK HSI is up over 180 pts at the time of writing. Dollar was additionally weighed down by Moody's warning and faces tremendous selling pressure against other major currencies. Dollar index broke 80 psychological level and is still on course to 78.60 support level next. Main focus today will be on German court's ruling on ESM but markets could probably look beyond it to tomorrow's FOMC meeting.

Moody's warned yesterday that it could lower the Aaa rating of US government debt if a deal cannot be reached from budget negotiations. The rating agency noted that in case the negotiations "lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable". However, "if those negotiations fail to produce such policies, however, Moody's would expect to lower the rating."

In China, Premier Wen Jiabao attempted to comfort investors and assured that the government would strive to boost economic. At the World Economic Forum, he stated that the government would "give greater priority to stabilizing growth... We have full confidence that the target for China's economic growth this year will be met". Wen emphasized that "be it monetary or fiscal, we still have ample strength." He also noted that there remained RMB 100B in the stabilization fund which would be deployed if needed.

The German Constitutional Court will decide on Wednesday whether it would allow Germany to join the ESM, a fund worth of 500B euro and is for bailout out debt-ridden countries in the Eurozone. Opponents of Germany's participation in the ESM conservative legislator Peter Gauweiler, a group called "Europe Needs More Democracy" and Germany's Left Party. The court would decide whether to issue a temporary order that would prevent rectification of the ESM. The order would last until the court announces its final decision on the full case, probably early next year.

Also in Europe, after meeting with Greece's Prime Minister, the ECB issued a statement, saying that "both parties agreed that Greece has already taken significant steps towards budgetary consolidation and economic modernization but that major challenges remain". The Prime Minister assured the ECB delegation of his and his government's commitment to getting the adjustment program back on track and continuing the necessary reforms for Greece to regain competitiveness and put its economy and public finances on a solid footing". In Portugal, a troika delegation also released a statement after his visit saying that "overall, this review confirms that the program is making progress, albeit against strong headwinds".

On the data front, Japan machine orders rose 4.6% mom in July while tertiary industry index dropped -0.8% mom. Domestic CGPI dropped -1.8% yoy. Australia Westpac consumer confidence rose 4.6% in September. German CPI was finalized at 2.1% yoy in August. UK job data will be the main focus in European session. Eurozone industrial production and US import prices and wholesale inventories will also be released.

Everyone ok?

I am. You?

http://theeconomiccollapseblog.com/a...the-u-s-dollar

http://theeconomiccollapseblog.com/w...ar-250x187.jpgThe mainstream media in the United States is almost totally ignoring one of the most important trends in global economics. This trend is going to cause the value of the U.S. dollar to fall dramatically and it is going to cause the cost of living in the United States to go way up. Right now, the U.S. dollar is the primary reserve currency of the world. Even though that status has been chipped away at in recent years, U.S. dollars still make up more than 60 percent of all foreign currency reserves in the world. Most international trade (including the buying and selling of oil) is conducted in U.S. dollars, and this gives the United States a tremendous economic advantage. Since so much trade is done in dollars, there is a constant demand for more dollars all over the globe from countries that need them for trading purposes. So the Federal Reserve is able to flood our financial system with dollars without it causing a tremendous amount of inflation because the rest of the world ends up soaking up a lot of those dollars. But now that is changing. China and Russia have been spearheading a movement to shift away from using the U.S. dollar in international trade. At the moment, the shift is happening gradually, but at some point a tipping point will come (for example if Saudi Arabia were to declare that it will no longer take U.S. dollars for oil) and the entire global financial system is going to change. When that tipping point comes the global demand for U.S. dollars is going to absolutely plummet and nightmarish inflation will come to the United States. If such a scenario sounds far out to you, then you have not been paying attention. In fact, China and Russia have been working very hard to move us toward exactly such a scenario.

China and Russia are not the "buddies" of the United States. The truth is that they are both ruthless competitors of the United States and leaders from both nations have been calling for a new global currency for years.
They don't like that the United States has a built-in advantage of having the reserve currency of the world, and over the past several years both countries have been busy making international agreements that seek to chip away at that advantage.

Just the other day, China and Germany agreed to start conducting an increasing amount of trade with each other in their own currencies.
You would think that a major currency agreement between the 2nd and 4th largest economies on the face of the planet would make headlines all over the United States.

Instead, the silence in the U.S. media was deafening.
At least there were some reports in the international media about this. The following is from a Reuters article about this very important deal....

Germany and China plan to conduct an increasing amount of their trade in euros and yuan, the two nations said in a joint statement after talks between Chancellor Angela Merkel and Chinese Premier Wen Jiabao in Beijing on Thursday.
"Both sides intend to support financial institutions and companies of both countries in the use of the renminbi and euro in bilateral trade and investments," said the text of the statement.

By itself, this deal would not be that alarming.
However, the truth is that both Russia and China have been making deals like this all over the globe in recent years. I detailed 11 more major agreements like the one that China and Germany just made in this article: "11 International Agreements That Are Nails In The Coffin Of The Petrodollar".

In that article I listed a few of the things that will likely happen when the petrodollar dies....

-Oil will cost a lot more.
-Everything will cost a lot more.
-There will be a lot less foreign demand for U.S. government debt.
-Interest rates on U.S. government debt will rise.
-Interest rates on just about everything in the U.S. economy will rise.

So enjoy going to "the dollar store" while you can.
It will turn into the "five and ten dollar store" soon enough.
Okay, so if you are China and Russia and you are working hard to undermine the dollar, how do you get prepared for the fiat currency crisis that your hard work will eventually create?
You guessed it. You hoard gold and other precious metals.
And that is exactly what China and Russia has been doing.
A recent MarketWatch article detailed the massive hoarding of gold that Russia has been doing....

I can’t imagine it means anything cheerful that Vladimir Putin, the Russian czar, is stockpiling gold as fast as he can get his hands on it.

According to the World Gold Council, Russia has more than doubled its gold reserves in the past five years. Putin has taken advantage of the financial crisis to build the world’s fifth-biggest gold pile in a handful of years, and is buying about half a billion dollars’ worth every month.

Of course Russia is not alone in hoarding gold. According to Zero Hedge, China has quietly been importing gigantic mountains of gold....

In July, Chinese gold imports from HK, after two months of declines, have picked up once more and hit a 3-month high of 75.8 tons. While it is notable that this number is double the 38.1 tons imported a year prior, and that year-to-date imports are now a record 458.6 tons, well over four times greater than the seven month total in 2011 which was 103.9 tons, what is far more important is that in the first seven months of 2012 alone China has imported nearly as much gold as the total holdings of the hedge fund at the heart of the Eurozone, elsewhere known simply as the European Central Bank, and just as importantly considering the import run-rate has hardly slowed down in August, which data we will have in a few weeks, it is now safe to say that in 2012 alone China has imported more gold than the ECB's entire official 502.1 tons of holdings.

And all over the world Chinese companies are buying up gold producers. China National Gold Group Corporation has put in a $3.9 billion bid to buy African Barrick Gold PLC, but that is only one example.

A recent Fox Business article listed a bunch of other similar transactions that have taken place recently....

Zijin Mining Group Co. (2899.HK), China's second-largest gold producer by output, said last week that its subsidiary has acquired more than 50% of Kalgoorlie's Norton Gold Fields (NGF.AU).

That deal gives it a foothold in the Australian market, the world's second-largest source of gold output after China itself. In 2011, Zijin bought 60% of Kazakhstan-based miner Altynken, which has access to a gold mine in Kyrgyzstan.

Since 2008, Chinese companies have completed 10 US$20-million-plus acquisitions of Australian gold assets, worth a combined $1.6 billion, according to Dealogic. Half were initiated since last year.

In November, Shandong Gold-Mining Co. (600547.SH) launched a bid to acquire Brazilian gold miner Jaguar Mining Inc. (JAG.T) for $1 billion.

Conclusions !!!


The truth is that the amount of printing the Federal Reserve has been doing and the amount of borrowing the federal government has been doing are both completely and totally unsustainable.
At this point, Moody's is threatening to cut the credit rating of the federal government if a deal is not reached soon to reduce our debt to GDP ratio.

And Moody's is not the only one concerned about our exploding debt.

German Finance Minister Wolfgang Schaeuble recently stated that he believes that "there is great uncertainty about the course American politics will take in dealing the U.S. government's debts, which are much too high".

Just because the economy is relatively stable right now does not mean that it is always going to be that way.
If we keep debasing our currency like this, at some point the rest of the world is going to decide that China and Russia have been right all along and that we need a new global reserve currency.

That day is coming. It might not come tomorrow or next week or next month but it is definitely coming.

Once the U.S. dollar loses reserve currency status, that will be a major turning point in the history of our country. We will never fully recover from that, and we will never get back to the same level of prosperity that we are enjoying today.

So enjoy spending those dollars while you can. The party is almost over.
http://theeconomiccollapseblog.com/w...And-Russia.jpg

Good to know PT.

I have locked in loss by opening long @ 1.2755 with x10 volumes of the total shorts. And few longs because I expect another volatility tomorrow.

Oh you can bet your entire life savings on that one.

Bullish volatility?

Btw, good luck longs. I wish I was able to go with you . But, you know what.

Okay now 1.2900 is broken on my charts. I now have a high of 1.29049

Well it looks like we finally got that "technical" pullback

Either way, I think should be fine all the longs are around 200 pips from BE now. If the price comes back I have sell stops @ 1.2755.

Holding for now..

Lol Germany 10y bonds +4,1%. Poor Germans. Still very low at 1,6 though.

Spain -1,47
Italy -1,16
Portugal -0,51

Source: forexpros

T

Reluctant to refund profits made last month and why not to make few pips from this rush.

Would seem the ruling says the power of the purse is to be retained by the German people.
Without immediate funds the ESM can do nothing.
This is a bucket of cold water on further bailouts.

Heavy intervention by the SNB may be distorting price.

But the USD sentiment is very Bearish as it is now a currency of last resort for the markets.

Sure foto? Do you understand German? Coz I have read only what they wrote at FT and heard engish translation at Bloomberg, but it seemed to me they have approved, but with a cap (wtf, are they economists, politicians, or judges?).

T

I'm anticipating this weekly divergence channel will hold @ 2930 with some over spill. Possibly then she'll pull back before either punching through or collapsing altogether...but lets see