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  • #840,001
  • Oct 2, 2013 4:22pm Oct 2, 2013 4:22pm
Quoting gatorinla
{quote} it went up 10$ "i guess thats possible .. but i dont have a couple hundred billion to move market. it would be much easier to do it through oil.. by having a terrorist blow up a pipeline.. or a big oil company just saying it..even it it didnt happen.. a friend of mine works in oil industy.. he wasnt there when incident happend but he had to install a wall in front a exit door on a construction trailor. constuction trailor was for a pipline being built. they keep a fence around the workers as pipeline is being built. anyway my buddy was...

my good god we have reached new heights ( quit while your ahead )

avoir
  • #840,002
  • Oct 2, 2013 4:27pm Oct 2, 2013 4:27pm
Quoting JeremyWS
{quote} yeah, that chart shows that there was no impact on EU, as Oil is priced in USD, when converted to EUR it should be flat if the EURUSD and oil do the same thing. Simple Maths I should add, if EURUSD was a direct reflection of oil then this chart would not change and stay flat.

i would add, had you been trading then, the catalyst would have been obvious in real time.
those who can, do. those who cant, talk about those who can
  • #840,003
  • Oct 2, 2013 4:29pm Oct 2, 2013 4:29pm
Quoting cohiba pips
{quote} my good god we have reached new heights ( quit while your ahead ) avoir

i will. i made it all up. deleting it now
those who can, do. those who cant, talk about those who can
  • #840,004
  • Oct 2, 2013 4:32pm Oct 2, 2013 4:32pm
Quoting JeremyWS
{quote} yeah, that chart shows that there was no impact on EU, as Oil is priced in USD, when converted to EUR it should be flat if the EURUSD and oil do the same thing. Simple Maths I should add, if EURUSD was a direct reflection of oil then this chart would not change and stay flat.
No, a chart comparing the percentage change of oil vs the percentage chart of euro would stay flat.

You are just showing the price of oil in euros.

That is not the same thing. Sorry, try again.
  • #840,005
  • Oct 2, 2013 4:32pm Oct 2, 2013 4:32pm
Quoting gatorinla
{quote} i would add, had you been trading then, the catalyst would have been obvious in real time.
well maybe, but their is no historical evidence to back this up - plus, as you say that relationship no longer occurs, so Oil won't move the EU or any other pair for that matter in the foreseeable future.
  • #840,006
  • Oct 2, 2013 4:35pm Oct 2, 2013 4:35pm
Quoting BoringIsGood
{quote} No, a chart comparing the percentage change of oil vs the percentage chart of euro would stay flat. You are just showing the price of oil in euros. That is not the same thing. Sorry, try again.
Yes I know - but this is what was implied from the point. if Oil moves 1%, then EURUSD moves 1%, this is not the case - in that scenario the chart would be flat.

Correlation and causation are not the same thing, but the point was that the Oil price jumping hugely meant that the EURUSD rallied a lot, and then we would see a major difference in Oil in EURs vs in USDs which there is not.
  • #840,007
  • Oct 2, 2013 4:37pm Oct 2, 2013 4:37pm
Quoting JeremyWS
{quote} well maybe, but their is no historical evidence to back this up - plus, as you say that relationship no longer occurs, so Oil won't move the EU or any other pair for that matter in the foreseeable future.

no matter what u interpret is in that chart. there are 100's of conversations made by people here. and in many news outlets on the phenomenon. that were done in real time.
those who can, do. those who cant, talk about those who can
  • #840,008
  • Oct 2, 2013 4:44pm Oct 2, 2013 4:44pm
Quoting gatorinla
{quote} no matter what u interpret is in that chart. there are 100's of conversations made my people here. and in many news outlets on the phenomenon. that were done in real time.
Yup.

There was a significant period of time where euro and oil moved in tandem. I was sitting at my trading desk monitoring the charts in real time, watching it.

Whether it is causation or correlation is basically irrelevant. That is for a conversation about WHY they were correlated. The fact is if you put up 2 charts, oil vs USD compared to euro vs USD, they would look remarkably similar.

Or if you put up a chart comparing the percentage change on each axis, it would hover around 1.0.
  • #840,009
  • Oct 2, 2013 4:44pm Oct 2, 2013 4:44pm
Quoting JeremyWS
{quote} Yes I know - but this is what was implied from the point. if Oil moves 1%, then EURUSD moves 1%, this is not the case - in that scenario the chart would be flat. Correlation and causation are not the same thing, but the point was that the Oil price jumping hugely meant that the EURUSD rallied a lot, and then we would see a major difference in Oil in EURs vs in USDs which there is not.

nope.. a 10% move on oil was hundreds of eu pips.. that's not = to a 10% eu move. what was implied (not by me), was it has little or no affect.
anyway no big thing. lets just drop it.. have a wonderful day
those who can, do. those who cant, talk about those who can
  • #840,010
  • Oct 2, 2013 4:45pm Oct 2, 2013 4:45pm
Just like the markets have recently moved out of a period where the DOW and the euro were significantly correlated.
  • #840,011
  • Oct 2, 2013 4:46pm Oct 2, 2013 4:46pm
Quoting BoringIsGood
{quote} Yup. There was a significant period of time where euro and oil moved in tandem. I was sitting at my trading desk monitoring the charts in real time, watching it. Whether it is causation or correlation is basically irrelevant. That is for a conversation about WHY they were correlated. The fact is if you put up 2 charts, oil vs USD compared to euro vs USD, they would look remarkably similar. Or if you put up a chart comparing the percentage change on each axis, it would hover around 1.0.
I think you missed the point of this discussion, the EURUSD and Oil do move in a very similar way, that is because they both have a USD component, there is no disputing this. The point was whether an Oil price spike directly caused the EURUSD to spike or whether it was the USD as a broad base causing Both to move in Tandem.

I was arguing that the USD was the similar factor, but gator was saying that the EUR moved higher Because of Oil moving higher - this is not correct.
  • #840,012
  • Oct 2, 2013 4:53pm Oct 2, 2013 4:53pm
Quoting JeremyWS
{quote} I think you missed the point of this discussion, the EURUSD and Oil do move in a very similar way, that is because they both have a USD component, there is no disputing this. The point was whether an Oil price spike directly caused the EURUSD to spike or whether it was the USD as a broad base causing Both to move in Tandem. I was arguing that the USD was the similar factor, but gator was saying that the EUR moved higher Because of Oil moving higher - this is not correct.
I'm going to pass trying to explain in detail why all USD based pairs aren't even close to correlated to each other.

Just remember this, if they were all the charts of the crosses (eur/aud, gbp/nzd, eur/cad, eur/chf, any yen cross, etc. etc. etc.) would be flat.

Have a good one.
  • #840,013
  • Oct 2, 2013 4:55pm Oct 2, 2013 4:55pm
Quoting JeremyWS
{quote} I think you missed the point of this discussion, the EURUSD and Oil do move in a very similar way, that is because they both have a USD component, there is no disputing this. The point was whether an Oil price spike directly caused the EURUSD to spike or whether it was the USD as a broad base causing Both to move in Tandem. I was arguing that the USD was the similar factor, but gator was saying that the EUR moved higher Because of Oil moving higher - this is not correct.

in real time a sabotaged pipeline or whatever would cause and oil spike... then minutes or less later the euro would spike . there is no way you can see this catalyst many of us traded through on your chart. i do not dispute the eur could spike before oil... but on the days we had the oil problems was also a cause.
those who can, do. those who cant, talk about those who can
  • #840,014
  • Oct 2, 2013 5:00pm Oct 2, 2013 5:00pm
Quoting BoringIsGood
{quote} I'm going to pass trying to explain in detail why all USD based pairs aren't even close to correlated to each other. Just remember this, if they were all the charts of the crosses (eur/aud, gbp/nzd, eur/cad, eur/chf, any yen cross, etc. etc. etc.) would be flat. Have a good one.
How foolish of me, I suppose you are right, Oil and USD aren't even closed to correlated, I mean -0.9 is nothing right??? Oh wait.
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  • #840,015
  • Oct 2, 2013 5:07pm Oct 2, 2013 5:07pm
Quoting JeremyWS
{quote} How foolish of me, I suppose you are right, Oil and USD aren't even closed to correlated, I mean -0.9 is nothing right??? Oh wait. {image}
Oh kiddo.

You just proved Gator's (and my) original point. LOL

Quoting JeremyWS
{quote} I think you missed the point of this discussion, the EURUSD and Oil do move in a very similar way, that is because they both have a USD component, there is no disputing this.
The reason they are correlated has NOTHING to do with the fact that both are dollar based pairs. NOT A THING.

Your statement assumes that any pair that is dollar based will be correlated, which is wildly inaccurate. And that is the point I tried to make without directly calling you stupid. But that window has closed. Now quit acting like a spoiled little kid who can't admit that he was wrong.
  • #840,016
  • Oct 2, 2013 5:12pm Oct 2, 2013 5:12pm
Quoting BoringIsGood
{quote} Oh kiddo. You just proved Gator's (and my) original point. LOL {quote} The reason they are correlated has NOTHING to do with the fact that both are dollar based pairs. NOT A THING. Your statement assumes that any pair that is dollar based will be correlated, which is wildly inaccurate. And that is the point I tried to make without directly calling you stupid. But that window has closed. Now quit acting like a spoiled little kid who can't admit that he was wrong.
Firstly, the point was to causation, not correlation.

in this case, please explain to me why both EUR and oil were going in the same direction if it weren't for the USD and the global macro aspect?
  • #840,017
  • Oct 2, 2013 5:17pm Oct 2, 2013 5:17pm
have a good one...
Inserted Video
those who can, do. those who cant, talk about those who can
  • #840,018
  • Oct 2, 2013 5:23pm Oct 2, 2013 5:23pm
Quoting JeremyWS
{quote} Firstly, the point was to causation, not correlation. in this case, please explain to me why both EUR and oil were going in the same direction if it weren't for the USD and the global macro aspect?
After the 08 crash, the correlation was at it's highest. And that is because the market generally accepted a dynamic that stimulus by the FED, which weakened the USD, was good for global growth and increased demand for oil.

Now, your clever little question doesn't address the fact that while historically, one has to sell USD in order to buy oil, why don't these oil producing/consuming countries currencies move in tandem?
  • #840,019
  • Oct 2, 2013 5:31pm Oct 2, 2013 5:31pm
Quoting BoringIsGood
{quote} After the 08 crash, the correlation was at it's highest. And that is because the market generally accepted a dynamic that stimulus by the FED, which weakened the USD, was good for global growth and increased demand for oil.

Now, your clever little question doesn't address the fact that while historically, one has to sell USD in order to buy oil, why don't these oil producing/consuming countries currencies move in tandem?
The first point is the exact argument I was using, good, glad we came to an agreement there.

Mathematical correlation between USDCAD and oil is not perfect but they sure look correlated when put on a chart together, so an oil producing country (canada) does move in tandem with oil, the RUB is very similar also (another oil producing country)

regarding importing countries - consider India and Gold. The recent sanctions on gold importing (because of the low Gold price YTD) led to an exodus of the INR (with 1M-spot spreads being over 5 rupees at one point) So in the example we can see causation between a USD based asset and the currency.

Until the USD isn't the reserve currency, it is undeniably going to be correlated with any asset priced in USD. Because that is how the maths works.
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  • #840,020
  • Oct 2, 2013 5:43pm Oct 2, 2013 5:43pm
I'm disappointed with GU development.
I'm still short from 1.6245 but I do realize there is also a chance it will go to 1.6380 first.
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