Euro/Dollar

That break out system has long term positive expectation... I've been trading it live for some time now. I'll take any short it indicates... if I looked ahead of every entry I can always find areas of upcoming support/resistance. Every 25 pips or so in either direction some argument can always be made for some S/R.

Price action still says down to me,
only buying dips in Fiber.
Target looks to be 9600-9650
giving us 3500-4000 on Fiber,
sounds crazy i'm sure but thats
what my charts are saying.

Well we got our needed fundy/news flow to tip the us off as to which count is better....

I had bet on one more push lower and to fill up longs around 2860, but we ran into a boatload of buying sub 2900 just seemed to have no bottom...

With the ESM being allowed to diversify into bank debt news flow... so they say this hour..... we got a good move out of the consolidation grind....

Current move to 2965 now has me thinking the fills @2860 are out of reach, hence the first Elliot count was the valid one, and no buying dip is to come. 2990 completes the ABC correction off 3173.

The Key now is besting the 2970 level and holding above it.... failure to take and hold that level opens up the 200 DMA and even 2750 as the market sells off seeking a better place to build a bottom than 2900.

I am likely done for the day.... there is way to much supply between 2960 and 3000 to get through and make some sense of the PA today with European close in just 2 hours. We not only need to take back 2970, we need to consolidate above it.

Outside chance Draghi speech may provide fireworks to get us there by taking out 1.3000, but short of something spectacular goosing the market.... it needs time to digest all that supply between 2960 and 3000, and we are running out of it today.

We trade off the failure of 2970 down into the support zone below the 38.2% retrace of the September move near 2915.

I have entered at 2915 with a small order, and have a few more layered in between 2915 and 2900 with a stop below the demand zone that existed today extending down to 2980.

US Stocks are off hard, which means Asian stocks likely to follow suit overnight keeping the pressure on. Given the huge demand from BIS and ME down into 2900 the last two day's I'm gambling we hold 2880 and try again to get above 2970 tomorrow.

Repeated failure of 2970 will see the market target the 200 DMA 2928 today and if it fails 2750.

Market after market, asset class after asset class has give up all of its QE3 announcement gains....

EURUSD would need to get down to 2855 to catch up with the other market's declines, where I was hoping to catch a fill most of Tuesday.

After the two day long solid demand in 2900 - 2885 area and large trader stops below 2880 holding, the question is will the demand zone hold for one more day, and EURUSD take another stab at getting established over 2970?

Failure to do so will see us test EURUSD FED announcement lows 2855, and if that fails to hold, we trade down to at least the 200 DMA 2928, or even down to 2750, where we should hold and put in end of wave 4 on a larger degree and head higher.

Watch the bond yield spreads -- This developing change may be the spark to sell off to the 200 DMA, or even 2750 -- When the bond markets get spooked, the post OMT bond yields rising and spreads widening will be the first sign that the we are entering a new phase of the Eurozone crisis....bonds always get it right, and first.
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Table being set for next phase of EZ crisis] It is becoming blatantly obvious that Germany has intensified its push back against progress towards fiscal union. Recent reports point to German resistance to Spain seeking aid from the ESM, which is needed to trigger the ECB into action in their much ballyhooed bond buying programme or OMT. Reports also indicate that Merkel is desperately trying to avoid having to front German parliament to ask for more money to cover Greece's shortfall that threatens a need for yet another restructuring. It is now being reported that a German led coalition that includes Finland and the Netherlands is seeking to unravel agreements made at June EU Summit. They now want ESM direct bank capitalization not to include existing debt. This flies in the face of the interpretation of the June Summit deal by countries such as Ireland, Portugal and Spain - as well as investors who bought European bank shares with their ears pinned back. What's more - the statement issued by Germany, Netherlands and Finland said ESM bank recapitalization cannot proceed until a banking supervisor is up and running. As the FT rightfully points out - it is Germany who is trying to undermine the French and EU efforts to get a supervisor up and running by early next year. The lines have been drawn for yet another showdown between highly indebted Eurozone countries that are trying desperately to renegotiate their agreed to austerity programmes and the northern paymasters who are desperately trying to renegotiate deals made under duress that brought the Eurozone closer to a fiscal and banking union. The EUR has significantly strengthened and stressed country bond yields have fallen sharply since ECB President Mario Draghi declared the ECB would do whatever it takes to save the Euro. But the ECB can only provide a time and liquidity bridge and it is up to the Eurozone government to use that precious time provided to act as one and march towards the banking and fiscal union needed for the Euro project to survive. It appears the relative calm in the Eurozone debt markets has resulted in polarization of the Eurozone and set the table for the next phase of the Eurozone sovereign debt crisis. Copyright (c) 2012 Thomson Reuters

Nikkei opens up below where it stood pre-FOMC QE3 announcment -- it joins the club -- how long till EURUSD?

I just cut these... most at BE, and ate a 11 pip loss on the 2915 entry...

The fundies are changing beneath our feet, The Germans are trying to backpedal on agreements made in June, Spain looks to not request a bailout unless it absolutely must, etc etc.

Most importantly is the cross market tech analysis... more and more markets have already given back all their pre- FOMC QE3 announcement gains, but EURUSD still needs to get down to 2855 to do that.

One more dead cat bounce may be in the cards, but it isn't worth further risk in my judgement.

I will fade 2950 again should we get there... Better a small loss now than taking the full loss as conditions that underpinned the trade fade away...

I considered re-entering my trades from Tuesday (Longs Layered from 2860 down to spike low of FOMC announcement), but have rejected the idea... we're in a new day, with some new info... and we have one run at and fail of 3070, which I was thinking was key to further upside....

The stops below 2755/60 will be too rich a target not to be taken out, and with the 200 DMA not far below, it will act like a magnet to price.... Longs against such a rich stop hunt target too risky.

Trade plan now is to fade the bounce of the 200 DMA.... targeting 2750...

Just got a fill on a small short from 2875 -- there are some bids at 2865 that have caught the fallling knife for now, but stops exist to be tripped below 2860/55 and when hit will be swoosh down...

Stop above 1.2900

We have now traded as low as 2856... which gives back 100% of all the FOMC QE3 announcement gains, and catches EURUSD up with every other market I follow....

Bids 2860/55 have stopped decline for now. Stops will have to be tripped below 2850 and 2840 to get to the 200 DMA.

The players bidding 1.2865/55 are following the Elliot count I favored yesterday posted below.... and looking a bit stretched now that we have traded all the way down to 1.2855ish.

Elliot can be tricky during corrective phases. Many Elliot artists make money during the impulse phase, and give it all back during the corrective phase.

The failure yesterday of 2970, which is an interim target below the 1.3105 target I put on the chart, and the deteriorating fundy climate made me switch off this count, and expect its failure, which will be confirmed with a move below 2850 after tripping the pile of stops down there.

Hence my cutting off longs last night, and my small speculative short this morning... I am waiting for 1.2750 where I expect to build a big long position... trades inside the corrective phase are riskier and need to be kept small.

Check on the tripping the stops sub 2850 ... this is the lowest EURUSD has been since German court ruling on ESM....

More stops below 2840 need to be tripped to open the way to the 200 Day moving average... also the 21 DMA lies just a few pips below the 200 DMA and there will be a few intrepid buyers lining up ahead of them.... not me.

We are on our way to 1.2750, and yesterday's Elliot count is now toast.

Spanish Ten Year yields wider by 5 1/2% today so far, now trading with a 445 basis point spread over the bund.

This is the widest we have seen since Draghi's OMT announcement.

Above 500 basis point spread was the norm during the height of the crisis... we may be on our way there, as the market forces Spain into a bailout request.

The wider the spread and higher the yield, the lower the EURUSD pair will go....

But shorts need to beware of a Spanish bailout request announcement as bonds force Rajoy's hand....

That was quite a strong bounce from sub 2850 -- too strong for Spec buying to account for.... will keep an eye on order flow -- suspect official (BIS, ACB, or ME) buying down there, which should have resulted in further weakness... not a quick bounce higher.

Starting to suspect reserve managers may try to put a 2850 floor under as they did 2900 figure last two days....

NY should give 2840 a run...


There is a 2850 strike today... could be an option expiry accounts for first bounce after yielding.

Italian Bond auction results due shortly -- a manipulated good auction result could help form a lower high -- Spanish Ten Year more important.

Good Italian auction result -- they were just 6 mos bills... will lighten the mood short term.... US stocks on the rebound under pinning the EURUSD rise more important...

This very strong V shaped recovery of US stocks (S&P 500 CFD data)
is helping EURUSD... fundies still suck... can carry EURUSD only so far....

IFR now reports French demand (Middle Eastern Fund behind order) drives Euro off lows, Asian Central bank fades in the 2860's.... BIS now seen selling into current high's...

I thought that was an overly strong bounce from sub 2850.... very disappointed that didn't lead to further breakdown....

Spanish Ten year trade 5.995% -- keeps edging higher -- Margins will be increased if spread reaches 450 basis points which will make the yield go even higher....

We are just under that level now...

Some may be betting that + 6% yield will force Rajoy's hand and make him request a bailout.... I think it will take 7% we saw pre-OMT announcement ....