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EurAnalysis Kindergarten 24 replies

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EurAnalysis

  • #71,461
  • Dec 11, 2013 2:40pm Dec 11, 2013 2:40pm
With a 2 year US budget deal agreed upon, a higher rate on today's 10 year treasury auction and a lower than expected US budget deficit this month, it seems the market is now thinking that the Fed will taper next week.
As such the US Dollar is stabilizing and equity markets are pulling back from their dizzying heights. Could this be the start of a turn around for the Euro and Cable? I'm not too confident about that just yet, but it's certainly a cue to keep an eye on it.
Those who say it cannot be done should not interrupt those who are doing it
  • #71,462
  • Dec 11, 2013 2:51pm Dec 11, 2013 2:51pm
Quoting NZ Chris
{quote} Would you like some from Santa????

Santa delivered mine last year.

I've got them firmly attached as I short EUR at 1.38

How about YOU?
Student of the Markets
  • #71,463
  • Dec 11, 2013 2:54pm Dec 11, 2013 2:54pm
Quoting dchristi
{quote} Santa delivered mine last year. I've got them firmly attached as I short EUR at 1.38 How about YOU?
Keeping mine close.... in my shorts..

Short from 3793 and 3747. REALLY hoping for a taper or at least another visit to 3600..
Short Euro and remaining that way. That's just the way it is !
  • #71,464
  • Dec 11, 2013 3:03pm Dec 11, 2013 3:03pm
Quoting NZ Chris
{quote} Keeping mine close.... in my shorts.. Short from 3793 and 3747. REALLY hoping for a taper or at least another visit to 3600..

Today's price action did resolve some technical price issues left pending when price deserted this area at the end of October. So, I'm obviously hoping for a similar result.

But of course, this IS forex, and we're talking about the Euro...so no guarantees.

That's where the brass balls come in handy.
Student of the Markets
  • #71,465
  • Dec 11, 2013 3:05pm Dec 11, 2013 3:05pm
Quoting PipTrapper
With a 2 year US budget deal agreed upon, a higher rate on today's 10 year treasury auction and a lower than expected US budget deficit this month, it seems the market is now thinking that the Fed will taper next week. As such the US Dollar is stabilizing and equity markets are pulling back from their dizzying heights. Could this be the start of a turn around for the Euro and Cable? I'm not too confident about that just yet, but it's certainly a cue to keep an eye on it.


Thinking through all the possible scenarios, I don't see why the trend in EUR and GBP should change before year end. Apparently the markets see Fed asset purchases and short term rates as COMPLETELY separate, and somehow reducing the asset purchases doesn't make the rate hikes closer. Now that last line obviously makes no sense, one would imagine if you executing a two step process, completing one step HAS to bring the 2nd step closer.

This idea that tapering isnt tightening didn't make sense in the Spring time and it doesn't make sense now. The idea is only working now because the Fed is thought to be considering some type of actual policy tool to keep short term rates down. I have read conflicting reports on this but it doesnt seem likely. Even reducing the unemployment rate threshold seems dumb, they continuously move the goal posts but ONLY when to express more dovish policy. It makes it seem as if forward guidance only works in one direction, which makes the entire policy questionable.

The decline in inflation globally is something to consider, it will probably be a long time before they actually hike rates and it seems this is what the market is looking at. Net net, if tapering is priced in already then theres less liquidity for carry trades, so the commodity currencies suffer. IN G4 land the comparative short term US rates are declining versus UK and German 2 years so EURUSD and GBPUSD continue to rise. Until the BoE and ECB lean against their respective currencies strength, there is no reason to fight these trends. Better off shorting currencies where the central bank is clearly fighting currency appreciation.


People will try to sound smart, but in reality nobody has any idea what the hell is 'priced in'. Is March taper priced in? Dec Taper? Does that taper in Summer 2014? Is that based on 200k jobs? Does that include the rumored schedule to wind down QE? Does the current level of short term rates include rumored fed rig jobs on short end rates?

Nobody knows, we are all just guessing and will not know until next week. But i do think that if the fed tapers and doesnt also come out with a hand holding operation for short end rates, THEN you will see EURUSD lower.
Twitter: @TrendersGame
  • #71,466
  • Dec 11, 2013 3:32pm Dec 11, 2013 3:32pm
Quoting Citiboy
{quote} Thinking through all the possible scenarios, I don't see why the trend in EUR and GBP should change before year end. Apparently the markets see Fed asset purchases and short term rates as COMPLETELY separate, and somehow reducing the asset purchases doesn't make the rate hikes closer. Now that last line obviously makes no sense, one would imagine if you executing a two step process, completing one step HAS to bring the 2nd step closer. This idea that tapering isnt tightening didn't make sense in the Spring time and it doesn't make sense...
Agreed on every single point. Nice summation of the situation.

I do think that regardless of the Euro's direction (also seen as "regardless of the Fed's policy decision"), we should at least see a pullback to 1.3630/50 area before 1.39xx
Those who say it cannot be done should not interrupt those who are doing it
  • #71,467
  • Dec 11, 2013 3:36pm Dec 11, 2013 3:36pm
Quoting mario83
{quote} I just read bloomie each day on mobile and see different funds / banks selling euro against USD and me trying to catch top{image}
Hey Mario... One more reason why you should not listen to Bloomberg reporters so much.

Bloomberg News Pays Reporters More If Their Stories Move Markets

Read more: http://www.businessinsider.com/bloom...#ixzz2nCjvzeSJ
Those who say it cannot be done should not interrupt those who are doing it
  • #71,468
  • Dec 11, 2013 4:15pm Dec 11, 2013 4:15pm
7 days up into a possible double top resistance, with good r/r, ... I cannot see anything wrong w/ this trade, especially FOMC doesn't hit the wire late next week. A tiny pullback to 1.37 makes this a worthwhile thought.

I'm not expecting a all out powerful short but before next Thursday, volatility should increase giving us more ranged trading opportunities.

I'm short .5 from 1.38, risking up to 3837 / 3852.

Good luck gentlemen
  • #71,469
  • Dec 11, 2013 4:53pm Dec 11, 2013 4:53pm
Quoting Orientxpress
7 days up into a possible double top resistance, with good r/r, ... I cannot see anything wrong w/ this trade, especially FOMC doesn't hit the wire late next week. A tiny pullback to 1.37 makes this a worthwhile thought. I'm not expecting a all out powerful short but before next Thursday, volatility should increase giving us more ranged trading opportunities. I'm short .5 from 1.38, risking up to 3837 / 3852. Good luck gentlemen
Thanks for posting. Makes lots of sense, but still very risky unless you're going to babysit the charts. As such, I admire your brass balls.
Those who say it cannot be done should not interrupt those who are doing it
  • #71,470
  • Dec 11, 2013 5:19pm Dec 11, 2013 5:19pm
A lot of people losing money with eurusd
Don't believe me just watch!
  • #71,471
  • Dec 11, 2013 5:35pm Dec 11, 2013 5:35pm
Quoting LCForex
A lot of people losing money with eurusd
for me in small TF like 1H or less is the most confusing pairs to analyze. at least in the last days...rrrrrrrrrrrr
  • #71,472
  • Dec 11, 2013 6:58pm Dec 11, 2013 6:58pm
Quoting PipTrapper
{quote} Hey Mario... One more reason why you should not listen to Bloomberg reporters so much. Bloomberg News Pays Reporters More If Their Stories Move Markets Read more: http://www.businessinsider.com/bloom...#ixzz2nCjvzeSJ

I won't read them through pink-glassess anymore… i should have stayed to my original plan but i switched to short again and now bleeding - hoping for pullback as well

good night and green pips to you all tomorrow
  • #71,473
  • Dec 11, 2013 9:37pm Dec 11, 2013 9:37pm
Scaling into very small EURGBP shorts starting here at 0.8429, think this FT piece out a couple of hours ago will start making the rounds and make for some very interesting sov bond price action going into 2014. Will keep adding to EURGBP up through 0.8470...


December 11, 2013 9:45 pm
ECB poised to get tough on sovereign bond risks
By Claire Jones in Frankfurt


A top official at the European Central Bank has signalled it will try to force eurozone banks to hold capital against sovereign bonds, in an attempt to stop weak lenders using its cash to hoover up the debts of crisis-hit countries.
Twitter: @TrendersGame
  • #71,474
  • Dec 11, 2013 10:35pm Dec 11, 2013 10:35pm
Quoting Citiboy
Scaling into very small EURGBP shorts starting here at 0.8429, think this FT piece out a couple of hours ago will start making the rounds and make for some very interesting sov bond price action going into 2014. Will keep adding to EURGBP up through 0.8470... December 11, 2013 9:45 pm ECB poised to get tough on sovereign bond risks By Claire Jones in Frankfurt A top official at the European Central Bank has signalled it will try to force eurozone banks to hold capital against sovereign bonds, in an attempt to stop weak lenders using its cash to...
Brave Man, I don't see anything yet that says short yet.......................

The Daily just came off a strong bottom 8 days ago, month is long.................
The More You Learn, The More You Earn.....
  • #71,475
  • Dec 11, 2013 10:44pm Dec 11, 2013 10:44pm
Its been trending lower for a while now and I was looking for a deep pullback to give it a shot. As long as daily doesnt close higher high I will be holding looking for maybe 30-50 points lower before taking some off.
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Twitter: @TrendersGame
  • #71,476
  • Dec 11, 2013 11:20pm Dec 11, 2013 11:20pm
Quoting Citiboy
Its been trending lower for a while now and I was looking for a deep pullback to give it a shot. As long as daily doesnt close higher high I will be holding looking for maybe 30-50 points lower before taking some off. {image}
Good Luck, All is Good................
The More You Learn, The More You Earn.....
  • #71,477
  • Dec 11, 2013 11:53pm Dec 11, 2013 11:53pm
Draghi Speaks in 2 hrs.... EUR UP for more.
  • #71,478
  • Dec 12, 2013 3:34am Dec 12, 2013 3:34am
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  • #71,479
  • Dec 12, 2013 5:20am Dec 12, 2013 5:20am
Good day all,

I remember this time last year (and the year before) I was kicking myself for spending too much time focusing on markets that are no going anywhere. What a colossal waste of time that was. Now I find myself doing the same. It is time to break this habit of trying to trade December low volume markets.

Put simply, I do not expect any breakouts with momentum. If we do see a breakout, I suspect it will fizzle out soon after. The only major event is the FOMC meeting next week and I'm pretty sure it's not going to be as big an event as most think. Regardless, there is always a chance. However, considering most houses have closed their books or are in the process of doing so, the chances are that whatever volatile knee jerk reaction we may get will be quickly faded or stopped short.

As such, I'm going to be spending less time here until January.

In the mean time, here is what I am expecting for the markets...

E/U: A pullback to around 1.3720 or possibly 1.3630 before a push for a new high.

G/U: Continuation of range between 1.6300 and 1.6460

SP500: A corrective pullback to the low 1700s before a resumption upwards to the 1840/50 levels. Alternatively if we get a taper next week, we could see a deeper correction to the mid 1500s

That's it for now. I guess we'll see how it all unravels eventually. Hard to trust the techs right now and fundamentals have been out the window for a while... so we're currently running blind until we get back to serious market participation in 2014.

Cheers and best of luck to all.
PT
Those who say it cannot be done should not interrupt those who are doing it
  • #71,480
  • Dec 12, 2013 7:24am Dec 12, 2013 7:24am
Hmmm. Looks like some news got leaked to the big boys... as usual.
Those who say it cannot be done should not interrupt those who are doing it
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