EUR and other currencies - recent move | Forex Factory

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EUR and other currencies - recent move

  • #1
  • First Post: Dec 27, 2013 6:53am Dec 27, 2013 6:53am
Hello!

Does anyone can explain in simple words what were the reasons why there was such a huge increase regarding EURO against all other currencies in the last 24 hours?
Almost 200 pips for EUR/USD.

Thanks!
  • #2
  • Dec 27, 2013 4:17pm Dec 27, 2013 4:17pm
130 views and nobody knows? Traders, cmon!
  • #3
  • Dec 27, 2013 5:11pm Dec 27, 2013 5:11pm
Quoting captialfm
Hello! Does anyone can explain in simple words what were the reasons why there was such a huge increase regarding EURO against all other currencies in the last 24 hours? Almost 200 pips for EUR/USD. Thanks!
Stop Hunting!
  • #4
  • Dec 27, 2013 5:27pm Dec 27, 2013 5:27pm
Euro rising could have been due to any number of reasons. A big corporation exchanging currencies, a fund manager rebalancing their sheets before year-end, a hedge fund opening/closing speculative positions, and the list goes on and on. In general conditions, it is almost impossible to find out exactly what caused a specific pip movement, unless you are the one involved. Also, markets are thinly traded right now due to the holiday season and so any move in the market will have a pronounced effect. As a rough example, an order that usually moves the market by 125 pips in normal conditions, could move it by 200 pips in a thin market where liquidity is limited. In my opinion the big moves of the year are already done so you are better off taking some time off and prepare for the new trading year. No point trying to label movements to anything if the markets are this slow and inactive.
  • #5
  • Dec 27, 2013 5:51pm Dec 27, 2013 5:51pm
Market illiquidity
  • #6
  • Dec 27, 2013 7:15pm Dec 27, 2013 7:15pm
EmeraldEyes,

how can illiquidity cause such a spike? Are you referring to lack of sellers?

i was just gladto catch 50 of those pips.
  • #7
  • Dec 27, 2013 9:58pm Dec 27, 2013 9:58pm
Quoting revival_fx
EmeraldEyes, how can illiquidity cause such a spike?
When there are fewer people participating in the market, spikes tend to happen. I was short on EUR and got stopped out by the spike. There are fewer people selling so the sellers that are in the market can demand a higher premium. The algo traders take advantage of this and the market moves. The EUR was also fueled by comments in the news about interest rates.

The "why" of a price spike doesn't really matter, you can spend all your time trying to find explanations for why this trade didn't work or that one did. All the information you really need is on your chart.

I've come to realize that "at best" you've got a 50/50 chance of a trade working out. Got to remember, for everyone selling EUR, someone out there is buying them. Eventually either buyers are willing to pay more (price moves up) or sellers are willing to sell for less (price moves down). Always have respect for the other person on the other side of your trade.
  • #8
  • Dec 28, 2013 12:17am Dec 28, 2013 12:17am
This was a test to see how many traders could take a small loss to avoid a large one.
  • #9
  • Dec 28, 2013 1:11am Dec 28, 2013 1:11am
Quoting revival_fx
EmeraldEyes, how can illiquidity cause such a spike? Are you referring to lack of sellers? i was just gladto catch 50 of those pips.
When the real money is making holidays, the markets become very thin. Money that normally would be absorbed by the really large players is now making the price. Volatility becomes bigger than usual, because you have less participants with big money. And since there were no news, it is likely that they just hunted for stops and then pushed the markets down.
  • #10
  • Dec 28, 2013 2:16am Dec 28, 2013 2:16am
A Stop Loss Hunter move.
Learn to Trade is Important. Keep your bias & ego aside.
  • #11
  • Dec 28, 2013 6:36am Dec 28, 2013 6:36am
The thin market is what allowed it to happen, but it was likely caused by Japan's good economics. It wasn't a EUR, GBP or CHF move, it was a USD and a JPY move. Look back at Thursday' night's charts to the time the move initially started - it came on the heels of Japan announcing rising wages and increased jobs. In a more liquid (normal) market, it wouldn't have reacted like that.
  • #12
  • Dec 28, 2013 8:20am Dec 28, 2013 8:20am
Not sure if you know who FTI is on FF but read the quick sentence he wrote about the EURO here.... http://www.forexfactory.com/showthre...04#post7177704
SPC * Swollen PocketZ Crew!
  • #13
  • Dec 28, 2013 9:06pm Dec 28, 2013 9:06pm
My take, no news on thin market. Stops above monday and tuesday highs taken out.
Also Euro s path of least resistance is up (on weekly and daily).

You can check past analysis on my blog: elitefive.wordpress.com

Have a great new year 2014!

~FibStalker
"markets traded by programs/HFT offer a significant trading edge..."
  • #14
  • Dec 29, 2013 6:15am Dec 29, 2013 6:15am
Quoting revival_fx
EmeraldEyes, how can illiquidity cause such a spike? Are you referring to lack of sellers? i was just gladto catch 50 of those pips.
Certain times the market is thin enough to move.
Large traders that knew what the current market microstructure was, ex. on EU: buy stops above 1.3815 and a large No-Touch option at 1.3850, used that on their behalf, as they traded with their firm/bank and exiting longs or entering shorts upon those 2 levels of buy stops. Similar action on GU as 1.6500 no-touch was within reach and now cheaper to $et off.

Call it insider trading, stop hunt, manipulation. Its a global decentralized market. You saw money change hands Friday. There's no way to tell when that will happen by looking at the charts, just happens during illiquid times. Like Christmas week. Illiquidity presents itself more often than you think, esp in FX.
  • #15
  • Dec 29, 2013 9:32am Dec 29, 2013 9:32am
Well, whatever the heck is the reason for the "spike", I think we can count on SOME kind of continuation stemming from this Draghi interview:


Draghi Sees No ‘Immediate’ Need for More Rate Cuts, Spiegel Says
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #16
  • Edited 9:54am Dec 29, 2013 9:39am | Edited 9:54am
Listen, maybe I'm misunderstanding what you meant here and if I am I apologize... with that said, not trying to be a dic but there's so much bull when it comes to this game it's getting really f-in annoying.

I disagree with the statement.


Quoting EmeraldEyes
{quote} There's no way to tell when that will happen by looking at the charts, just happens during illiquid times. Like Christmas week. Illiquidity presents itself more often than you think, esp in FX.
bull... bull... bull...

Many had this pegged even amateurs like myself...

Attached Image (click to enlarge)
Click to Enlarge Name: eurusdm15.gif Size: 17 KB


and then.....

Attached Image (click to enlarge)
Click to Enlarge Name: eurusdm215.gif Size: 13 KB



over and out......
SPC * Swollen PocketZ Crew!
  • #17
  • Dec 29, 2013 9:50am Dec 29, 2013 9:50am
Quoting JoeNY
Listen, maybe I'm misunderstanding what you meant here and if I am I apologize... with that said, not trying to be a dic but there's so much bull when it comes to this game it's getting really f-in annoying. I disagree with the statement. {quote} bull... bull... bull... Many had this pegged and not just an amateur like myself... {image} and then..... {image} over and out......
1. I agree it's a textbook move (as per your charts), but....

2. ... for me, it was only textbook after the fact. It could've gone either way even after taking into account the possible Draghi link.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #18
  • Dec 29, 2013 9:59am Dec 29, 2013 9:59am
Yeah but that's trading, no one can predict the future but the probabilities of a profitable move in whichever direction using experience in price action are all you need. Wait for confirmations, use of stops and even go the other way if your initial entry was wrong. Either way you are in the money... You have to be in it to win it. Play the trade not watch it happen. Control your risk and be in this crap.... You have to play every setup... control your risk.... You can be right less than 50% of the time and prosper.. Let the winners run....

Quoting skenobi
{quote} 1. I agree it's a textbook move (as per your charts), but.... 2. ... for me, it was only textbook after the fact. It could've gone either way even after taking into account the possible Draghi link.
SPC * Swollen PocketZ Crew!
  • #19
  • Dec 29, 2013 10:18am Dec 29, 2013 10:18am
Quoting JoeNY
Yeah but that's trading, no one can predict the future but the probabilities of a profitable move in whichever direction using experience in price action are all you need. Wait for confirmations, use of stops and even go the other way if your initial entry was wrong. Either way you are in the money... You have to be in it to win it. Play the trade not watch it happen. Control your risk and be in this crap.... You have to play every setup... control your risk.... You can be right less than 50% of the time and prosper.. Let the winners run.... {quote}...
I ain't sayin' you're wrong, bro. I only said "for ME, it was only textbook after the fact."

I'm sure you have an edge that works for you (as do I for me) and a major principle in trading that I've followed in all the years I've been in this business is that I don't knock other people's way of making money.

Anyways, I was just giving my two cents to the threadstarter's question.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #20
  • Dec 29, 2013 11:14am Dec 29, 2013 11:14am
Typical parabolic move. e.g. Take a look at AUDUSD on 11.12 and 11.19 and 12.11 - similar principles.
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