EurAnalysis

Hummm...that means we are down another 100 pips.

thank u for the kind words wulfgar,much appreciated,i think i owe u an apology as i was not very nice to u in recent past,my mistake,please do accept my apologies.thank u.

My deepest condolences to you and the rest of the family Doc. Please find solace in the fact that he has taught you well and prepared you to pass on his wisdom and kindheartedness. May he rest in peace and may you find the courage and strength to continue in his footsteps. God bless you.

Good morning fellow traders.

Introducing Greece II. Yes, we've seen this movie before. It's a story about what happens when democracy is sidelined in the pursuit of more centralized power over money. Yes that's right... I am talking about Spain. Yesterday protesters took the the streets of Madrid in a show of solidarity against the anticipated austere budget that Mariano Rajoy's government is due to present tomorrow (Thursday). As anticipated, things got violent. With over 26% unemployment and an estimate that the youth (Under 25) unemployment is actually over 50%, one cannot expect a pleasant outcome. After all, the Spanish government has gone ahead with constitutional changes without consulting the people through a referendum. So, why wouldn't they be angry?

Well today we may even get a replay of Greece (The Original) as we head into a general strike in the Hellenic country. Protests are expected and I am sure they will show the world in Greek style that they also are not happy with the way their government promised relief from harsh austerity in the election campaign, and then did a turn about face once in office. Greece also did not get a referendum because when former Prime Minister Papandreou called for one, Brussels got very upset and replaced him with a technocrat. Two elections later, after unable to form a coalition government after the first one, enter a new Prime Minister Antonis Samaras; full of promises to bring relief from harsh austerity by re-negotiating the deal with the Troika. The people loved it because it meant that they get to keep the Euro and avoid massive inflation. It's been broken promises since then. So, I don't expect today's protests to be very peaceful.

So what are the implications? Well in the short term, it doesn't matter what half a million people do on the streets of their respective capitals. What really matters is what the governments decide. However, in the long term, the people's will should prevail because no matter what policies a government comes up with, it's the implementation that the people control. So, Spain may seek aid from the EFSF/ESM and the people may be bulldozed into swallowing harsh austerity measures as the condition for aid, but without the people's cooperation, just like in Greece, the austerity program will fail.

So, in line with my previous post on all the reasons why I am short the Euro, my sentiment on this pair remains bearish.

From an intraday technical perspective, price has this morning found support at the 1.2865 level. Notwithstanding a major rout that breaks support in early European trade, from here I expect to see a bounce back up towards the previously broken support at 1.2885 for a re-test as resistance. The next level up from there which should offer good resistance is 1.2900/10 area which provided very strong support yesterday and Monday. 1.2900/10 was also the pre-QE3 announcement price level. Now that we have managed to penetrate that psychological level to the downside, any visits above that level are a signal for me to sell... and sell I will.

Best of luck today and as always, trade safe.

Pete Jackson's Order Board:

EUR/USD: Offers 1.2950/70 with more 1.2980/00, Bids 1.2850/60, (1.2857 Sep 13 low) sell stops below through 1.2850 (and possibly 1.2840) ahead of more bids 1.2825/35 (tech support at 200 day MA at 1.2827) and 1.2800/10

Today's FX Option Expiries:

EUR/USD: 1.2850, 1.2910, 1.2950, 1.3000

E/U H1

my deepest condolences, may he rest in peace

Accepted my friend.
The quote is my sig is from Plato. Written thousands of years ago. It certainly still holds true to this day.
And some battles are tougher than other...

I always wondered - do police staff have a choice to participate or not to in these kinds of activity..? ...to "manage" crowd by beating people?

May his soul rest in peace . sorry for the loss , take care

I don't think they have a choice as long as they want to keep their jobs. Of course they always have the choice to quit. However, from what I have seen in the videos, they seem to enjoy beating people. How unfortunate.

Yea...so much of very unnecessary "swings"..Old Man and a girl got the most..
And PR division of justice and police departments worked so hard and spent much of that deficit budget for the whole years to improve policemans image..

It would be a perfect example for E/U to bounce exactly 40 pips till 2895 where overnight lows sits...

may his memory be a blessing.

drzakir,
though we lose loved ones in this life, they always remain with us, in our hearts and in our spirit.

I wouldn't call it exactly 100 pips but overall sentiment are not looking good. See how many pips Asia drop then London and can expect the same in NY session.

Opportunities to short USD pairs on pullback.

NY already dropped yesterday. Today might continue, especially if the Spaniards start rioting again... which they probably will.

i would say watch the daily 200 sma.

Agreed. Looks good for a target today if the stops below here get triggered. 1.2840 is a buy zone, but they are probably weaker than the bears right now. Time will tell.

Waiting for pullback to short?

Does this riot happen every year on your birthday?

and the daily 200 ema.

Doc,
I just awoke and saw this and I am truly sorry for your loss. The living will mourn, as life is a temporary state. The soul of a good man/woman lives on in the people they touched, the good they left behind, and the manner in which they lived. May you and your family find comfort in this trying time. God Bless and Godspeed.