EURUSD

Hey dude,ya don`t talk about God like ya talking to some other man like you. God is to be revered ( and you and every living being owe Him that)

Just some thoughts, EUR bearish as usually.

The speculation of Sept taper bring us from level 2 to level 1.

When it back to level, it retraced 50% level 1-level2 to 1.31, then it went up to Level 3 on mix of US Gov closure + Yellen fed presidency.

Then it retraced 50% level 1-level3 to level 2 on ECB rate cut.

But now we are back to level 3.

If level 1 priced in a Sept taper, why given ECB has cut rate, while the differential of speed of growth between US and EU widen, and with a Dec taper or Jan taper in sight, we are still at level 3 that's 1000 pips higher? Shouldn't we be at a level near level 1 or at least between level 1 and level 2?

There are some possibilities,

1.Fed's Taper is not Easing rhetoric accepted by market thus market is pricing in lower future interest rate
2.Speculation for a taper much later than Dec/Jan
3.ECB facing more opposition from Germans on further easing

However I don't buy into any of these
1.Short term US IR fell but long term IR risen
2.Taper is coming, and Dec/Jan taper highly likely given there are 3 hawks rotated into FOMC next year
3.Europe is not German's back garden, they can't just do everything the way they want to, or they will face a break up of euro and EU
Plus
4.If euro continue higher, the exchange rate will feedback into the economy and ECB's policy stance, Med club countries will face more economic difficulties, German will face more pressure in loosing its grid over ECB's easing policy

I think more likely we should go back to the region between level 2 and level 1 after FOMC. I think that region is a more stable level reflects the economic reality and policy differential between Fed/ECB at the moment.

Of course there are distortion from EURJPY buying and EURJPY move is more genuine than EURUSD move at the moment.

I agree with your thinking.I am holding my Bear positions to 1.33
To me latest up trend was nothing but profit taking at year end considering retail traders were 75% short.
regards
edit wanted to add
Google 2014 Euro zone crises and read the articles on Greece,Spain.Portugal and you will come to realization that everything is not as rosy as projected on price of Euro now.Things could change dramatically and very fast.

so won`t they taper the paper?

weekly, no words…1.49 about..

Market will open at 1.3720

why you said that

Some further thoughts on the monthly chart:

Start from 2008 crisis: we had 3 QEs each followed by a wave of EURUSD uptrend, then 2 Greek crisises(and of course Portugal/Ireland/Spain/Italy) each followed by a wave of sharp EURUSD decline to the 1.2 region.

Now we are close to the end of QE3 and ECB banking supervision/SRM/Great stress test, doesn't it make sense that another wave of downward wave is about to start.

Look closely, QE2 coupled with Trichet 1%-1.5% hike only bring EURUSD to 1.49 which was the high achieved by QE1. Then QE3, albeit much bigger than previous 2 QEs only followed with a relatively mild EURUSD appreciation. This price action points to some longer term economic trend. The bull run from 2002 to 2008 overlap with a period of higher growth in EU compare to US, now this is reversed as well, US is slowly getting back to a reasonable growth while EU is in a troubled status.

Technically the EURUSD is running towards the long term downward top trendline, it looks like a bearish triangle is forming, and that's a bearish reversal pattern, normally followed by a break to the downside.

All these factors points to a longer term trend reversal of the 2002 to 2008 bull run back towards the downside. While timing is still uncertain, the direction is relatively clear.

The market can be irrational and EURUSD can run up, but not very far, higher exchange rate do feedback to the real economy, especially troubled economy which is in a recovery states. The price action mentioned above not only is a reflection of the longer term real growth differential that's reversed to the US favor, it is probably also points to the continuation of the down trend of 2011-2012 and a rather sharp decline of EURUSD to a much lower level.

Man, that doesn't make sense, 1.49 was last achieved when Claudio "The Vigilant" Trichet stupidly hiked rate from 1.0% to 1.5% between 2 crisis, can't see any reason how we are going to get there when current ECB rate is at 0.25% with no hope to go higher anytime soon.

Con artistic is a serious Job, requires dedication and commitment. The artist has to create a story, live it and keep reinforcing it on others indirectly to fully believe it ... But, when it comes to Forex factory 's con artists - no one beats these bastards in professionalism, dedication & commitment. They are foxy, ruthless , quick and with great sense of humor.

And the prize goes to:

Daily Chart

RSI touched the 70 level a few days ago. But it started to fall under 70 again.

What does it mean?

this is unusual. many banks hold bullish view in the news

hahaha...hardcore failure.

Fuck what the banks say, they're as reliable as Goldman Sachs directing you to buy stocks after a massive rally.

Here we go again with new “insane” levels against the dollar across the board and taper is right behind the corner to give us a trade of the lifetime. Or is it? While many planning their big long dollar of the lifetime, market movers already in their big short of their own record.

Let’s take a look to what happened trough out the year. The first wave of taper expectations started to gather momentum in June, but with unexpected Bernanke’s assurance “for foreseeable future” EUR/USD printed a record 400 pip daily candle and kept going until September. Then again – just a bit of profit taking and all the fuss in the financial media about not “if”, but “how much” taper will be announced. That day Gold had some buying right in to the moment of announcement – very suspicious developments if you believe that all market participants got “the news” at the same time.
And now – again… Couple of marginally better numbers and speculations began. Let’s face it – employment data is nowhere close to pre 2008 levels and recent two NFP prints is just a non-event, compared to constant 300-400k add-ups in older days.. But, is employment or any other macro data have any importance for FED at all when it comes to unprecedented QEasing of all times?

Interest of the Public vs Elite/Business interest. They always declaring public interest, but acting on behalf of the elite/business. Politicians use term Democracy when in reality it is Corpocracy. So the FED, they claiming that whole thing is for the economy, but in reality it’s all about markets and their market moving thug friends.

Close circle. It’s naive to think, that central banks do not communicate “behind closed doors” with the major banks. That’s a close circle and they help each other. Central bank needs support/understanding from bankers to buy junk government debt with “reasonable” rates and in exchange – central bank gives some nice trade opportunities, which comes up of policy changes of a central bank (rate decisions and etc.).
And the FED… A central bank with private shareholders! Somewhat this fact gets understated in the context of all the talks about crisis, FED, QE’s and expectations in the financial media.

Stock market technicals are the most important. If it’s all about the markets and if major banks know in advance about FED’s decisions, it would be logical to assume, that the main aspect that FED considers as a trigger for taper is technical developments in the markets and especially - S&P500 index. When stocks will reach significant enough highs, that taper induced corrections won’t break the trend in one swing, than it will be the time. I have 1850-1880’s area as most probable turning point of a current S&P500 trend and until then I would be very skeptical about QEnding prospects.

Test and confirmation. The most basic price action behavior at the level – with test and retest, followed by breakout or rejection represents the fundamentals of human psychology and dynamics of liquidity. Maybe same principle could be applied for FED’s taper schedule and its impact on the markets. First taper should be small/symbolic (a test) which will produce strong knee-jerk reaction. But considering, that remaining monthly injections – 60/70 billions will still be an enormous amount and that pace could be maintained for next 6-8 months, probably means that market trends will continue. Second taper announcement – no matter how much, should mark an essential turning point in the “QEternity” - a confirmation (retest) about FEDs policy change for good. Of course, market movers will start way before the second announcement of the taper. And again - clues should be looked in the technicals of the markets.


At some point, tapering will be announced and maybe even this week, but it doesn’t mean that we won’t get prolonged periods of further easing and inevitably shattered expectations for more taper in the future.

So, taper or no taper – expect the unexpected. Despite all the opinions and analysis in the financial media, one must understand, that for an outsider it’s always – 50/50 probability for FED to taper or not at every FOMC meeting. First announcement of the tapper is intentionally over-escalated and may end up with another bull swing in the markets. Financial media and politics will tout about FED’s success as even taper didn’t stopped the rise of the markets (aka economy J). But sooner or later – deep correction will come. Probably somewhere in between first and second taper.

Technical scenarios for FX majors. Euro and Pound seems preparing for another leg up, but at the same tame they could drop at any point of current range as they have risen so high since September. Gold and Aussie sits at the bottom of their respective ranges and ready to continue monthly/quarterly bullish correction, but at the same time – another leg lower before bullish continuation wouldn’t hurt as better price with additional liquidity will be good enough reason for market movers to long later.
Yen have plenty of room to go both sides, but bearish correction is long overdue – either inside recent weekly swing up or maybe even deeper in to the yearly range.

Here are projections for major currency pairs in regards of December’s taper decision – general directions and essential hesitation/rejection areas:

Sometiems you really wonder ... can stupidity reach these levels !

Very good ! Deep yet easy to understand.

there may be chance for downward trend for trend in the second session...... The market can be risk and the dollar will be in downward mode and the price of gold may increase upto to a certan extent......

"BE CAREFULL !!" David Ilyas ?

C'mon it's getting boring

"BE CAREFULL !!" was not very carefull, Why was he kicked out

weekly chart

I see a wave 2 in round numbers 126600 and see a wave 5 has not yet terminated.
without further comments.