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  • #64,521
  • Edited 8:47am Jan 4, 2013 8:11am | Edited 8:47am
If we have 7.8 % rate, and FED seeks for 6.5%. And IF for some mirracle we get 0.1% decline every month, then 13 months at min, so to end QE's solely on employment data in 2013 looks just too unreal..
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  • #64,522
  • Jan 4, 2013 8:18am Jan 4, 2013 8:18am
good buy set up on E/U, anybody want 1.33?
  • #64,523
  • Jan 4, 2013 8:28am Jan 4, 2013 8:28am
Quoting rekon67
good buy set up on E/U, anybody want 1.33?
What is the set-up? What timeframe and what signal? NFP hike is unreliable as it usually reverses pretty quickly afterwards.
  • #64,524
  • Jan 4, 2013 8:28am Jan 4, 2013 8:28am
Quoting Turtle Man
Halkins is clear to me simple charts can be read and a skilled chartist can see the "whale" As in any ocean the sea has many whales of various sizes and at various depths ..... but they can not hide......... they can be found and just do as they do
Quoting 100PipsADay
I actually think that the moves fell in line very nicely when looking at EUR/USD, GBP/USD, and AUD/USD. When looking at EUR/AUD and GBP/AUD price has come back down (retraced) to their weekly trend lines almost perfectly.
Yes Turtle, 100Pips :-), but usually all pairs were highly correlated.
The fiscal Cliff agreement hit the table hard and it takes time now for all dust to settle…
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Read Charts - Not Papers
  • #64,525
  • Jan 4, 2013 8:34am Jan 4, 2013 8:34am
Quoting rekon67
good buy set up on E/U, anybody want 1.33?
Not sure until they announce about the rate cut or not.
  • #64,526
  • Jan 4, 2013 8:38am Jan 4, 2013 8:38am
Quoting Likerty
If we have 7.8 % trate, and FED seeks for 6.5%. And IF for some mirracle we get 0.1% decline every month, then 13 months at min, so to end QE's solely on employment data in 2013 looks just too unreal..
You're mixing QE with rate increases when you talk about FED's new benchmarks. So, IF we should get an unemployment level at or near 6,5% by the end of the year then the FED is (at least that's the expectations) raising rates not just ending QE.
  • #64,527
  • Jan 4, 2013 8:51am Jan 4, 2013 8:51am
we might get some needed insight today re: FOMC minutes. Yellen, Plosser and Bullard are speaking today.

13:15ET/18:15GMT: Philly Fed President Plosser Participates in "Real Business Cycle after Three Decades: Past, Present and Future" before the American Economic Association annual conference

15:30EST/20:30GMT Fed Reserve Vice Chair Yellen Speaks on "Financial System Interconnectedness and Systemic Risk: Lessons from the Crisis and Policy Implications" before an American Economic Association/American Finance Association luncheon as part of the AEA annual conference

17:30EST/22:30GMT St. Louis Fed President Bullard Participates in "Federal Reserve Independence in the Aftermath of the Financial Crisis: Should We Be Worried?" panel before the American Economic Association
Any prices quoted are futures
  • #64,528
  • Jan 4, 2013 8:56am Jan 4, 2013 8:56am
Quoting lumesh
You're mixing QE with rate increases when you talk about FED's new benchmarks. So, IF we should get an unemployment level at or near 6,5% by the end of the year then the FED is (at least that's the expectations) raising rates not just ending QE.
You're right I just trying to apply some straight forward thinking as there is too much of speculations around the topic.. Personally I dount think that unemplayment will approach these levels ever because of technology/modernisation that takes out manual work and all the problems relating to immigration of course..

Unless they manage to adjust analysis methods for statistics accordingly)
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  • #64,529
  • Jan 4, 2013 9:15am Jan 4, 2013 9:15am
Quoting 100PipsADay
Hi Alorente,

If you're interested I posted my analysis with charts for AUD/USD and GBP/USD here: http://www.forexfactory.com/showthre...98#post6337698

Hopefully this helps...
Thanks. I read your analysis. I am on the other side of that trade now. I needed to see how EurUsd reacted upon test of 1.30. It held nicely, along with the 50 MA on the daily, which is moving higher. I am now long all the way. my projected price levels for the following 6 months are in Red on the attached weekly charts.
Attached Image(s) (click to enlarge)
Click to Enlarge Name: eurusd.jpg Size: 191 KB
Click to Enlarge Name: gbpusd.jpg Size: 182 KB
Click to Enlarge Name: audusd.jpg Size: 171 KB
Observation is the path to discovery.
  • #64,530
  • Jan 4, 2013 9:17am Jan 4, 2013 9:17am
Quoting 100PipsADay
Hi Alorente,

If you're interested I posted my analysis with charts for AUD/USD and GBP/USD here: http://www.forexfactory.com/showthre...98#post6337698

Hopefully this helps...
Regarding USD, yes, I expect it to flounder. We could well break the neckline on the daily USD Index Head & Shoulders. See attached.


Fundamentally, the reasons behind my price projections are quite simple:

1- Enormous amounts of liquidity injected by all Central Banks. The world is swimming in money.

2- Historically high Bond prices and low yields will attract less money to the bond market.

3- Money will be entering the Stock Market in increasing amounts, especially after we make new highs in all the indexes.

4- China is finally on an upswing and its stock market is booming. Also the Dax, Nikkei, Ibex and many others.

5- Commodity prices are starting to climb with China´s turn around. That will do wonders for commodity currencies: AUD, NZD, CAD.

Barring an unlikely European/Greek surprise, it is risk on all the way for the next 6 to 9 months. There may be a small correction here and there, but overall, I see clear sailing ahead. We´ll climb the proverbial Wall of Worry.
Attached Image
Observation is the path to discovery.
  • #64,531
  • Jan 4, 2013 9:32am Jan 4, 2013 9:32am
referring to the posted chart above by alorente, usd break 79 level and E/U fly higher. At the moment pretty valid to see 1.3000 as support, demand reaction on this level is a good indi for next week and so forth direction.
  • #64,532
  • Jan 4, 2013 10:43am Jan 4, 2013 10:43am
Quoting lumesh
You're mixing QE with rate increases when you talk about FED's new benchmarks. So, IF we should get an unemployment level at or near 6,5% by the end of the year then the FED is (at least that's the expectations) raising rates not just ending QE.
You will be laying in bed with both Beyonce and Angelina Jolie before we see 6.5% unemployment. And if we did see it,dont believe it, and if you could believe it how does that help the 24% OF AMERICANS working at or near minimum wage and live paycheck to paycheck. every day i believe a new gang forms a new desperate mother commits fraud, bad things happen because desperate people do bad things. vbery desperate people do very bad things! Watch gangland and lock up on TV or netflix lately. even you tube has them. this country is going to be siphoning off rediculous amounts for border security and prisons. when will that be addressed?????
  • #64,533
  • Jan 4, 2013 11:16am Jan 4, 2013 11:16am
Quoting Likerty
Personally I dount think that unemplayment will approach these levels ever because of technology/modernisation that takes out manual work
That IS going to be the problem of the future.

Just like low rates are going to be the norm in the future. At least as long as we are going to have CB's manually determining the rates.
I mean, why would anybody earn a high percent doing nothing?
  • #64,534
  • Jan 4, 2013 1:33pm Jan 4, 2013 1:33pm
Can somebody tell me what higher treasury yield does for the USD?

You can see that the benchmark yield on the 10-year Treasury Note has exploded out of a multi-month range.

It hit 1.97% earlier this morning, the highest since last May, after breaking a downtrend that goes all the way back to February of 2011!
http://finance.moneyandmarkets.com/m...2622/chart.gif
  • #64,535
  • Jan 4, 2013 1:47pm Jan 4, 2013 1:47pm
Quoting 100PipsADay
Can somebody tell me what higher treasury yield does for the USD?

You can see that the benchmark yield on the 10-year Treasury Note has exploded out of a multi-month range.

It hit 1.97% earlier this morning, the highest since last May, after breaking a downtrend that goes all the way back to February of 2011!
http://finance.moneyandmarkets.com/m...2622/chart.gif
indeed. many don't grasp the true gravity of the treasury bubble. if there is a successful test of fed credibility (denoted by Lacker today), there will be a serious, catastrophic problem with debt sustainability that will likely dwarf the housing bubble.
Attached Image (click to enlarge)
Click to Enlarge Name: 30y.jpg Size: 139 KB
Any prices quoted are futures
  • #64,536
  • Jan 4, 2013 1:52pm Jan 4, 2013 1:52pm
Quoting redteamgo
indeed. many don't grasp the true gravity of the treasury bubble. if there is a successful test of fed credibility (denoted by Lacker today), there will be a serious, catastrophic problem with debt sustainability that will likely dwarf the housing bubble.
Is this USD bullish or bearish if treasury yields rise?
  • #64,537
  • Jan 4, 2013 1:54pm Jan 4, 2013 1:54pm
I think if yields rise should be dollar bearish.
  • #64,538
  • Jan 4, 2013 1:58pm Jan 4, 2013 1:58pm
Quoting Ken A
I think if yields rise should be dollar bearish.
Interesting...

This goes against my analysis for most currency pairs but I can't ignore it.
  • #64,539
  • Jan 4, 2013 2:03pm Jan 4, 2013 2:03pm
Quoting 100PipsADay
Is this USD bullish or bearish if treasury yields rise?
honestly, i dont think anyone can say for sure. we would be in uncharted territory and largely depends on if and how the fed can unwind its balance sheet accompanied by a rise in real rates.
Any prices quoted are futures
  • #64,540
  • Jan 4, 2013 2:09pm Jan 4, 2013 2:09pm
Quoting redteamgo
if japan is an indicator, it would be extremely bullish for the USD. yields increase, bond prices decrease, usd appreciates

honestly, i dont think anyone can say for sure. we would be in uncharted territory
After doing a little digging around I think you're right. But still not entirely sure...

Found this: http://www.babypips.com/blogs/pipono...us-dollar.html

How Treasury Yields Affect the Economy:

As Treasury yields increase, so do the interest rates on fixed-rate mortgages. This makes it more expensive to buy a home, so demand for homes decrease, and therefore so do the prices of homes. This, then, has a negative impact on the economy, and can slow GDP growth.
Higher Treasury yields mean that the Treasury Department will be forced to pay a higher interest rate to attract buyers. Over time, these higher rates can start to increase demand for Treasury products. That's why higher Treasury yields can increase the value of the dollar.

I guess this still fits nicely with my current analysis!

**Folks, keep in mind the affects it would have if USD interest rates rose even by the slightest amount... Don't think the FED is actually going to wait until 2015 to do this either. Just follow the charts and right now Treasury Yields are on the rise. I wonder if yesterday's FOMC minutes was any type of coincidence?

There is an inverse correlation between Bond Value and Bond Yield. That's why Treasury yields move in the opposite direction of Treasury bond values. So if we are getting ready for the Bond Bubble to pop, then it would be safe to say that we should get ready for the USD to rally. People have been talking about the Bond Collapse for quite some time but keep an eye on the charts.
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