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“The strengthening of the effective euro exchange rate over the past one and a
half years has certainly had a significant impact on our low rate of inflation and,
given current levels of inflation, is therefore becoming increasingly relevant in our
assessment of price stability”. (Mario Draghi, 13 March 2014)

In this moment seems that selling the eur/usd rallies is the best thing to do.


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My appetite for adding trades to my portfolio is growing lately so I will keep this short and technical even though there are some fundamentals sustaining these moves. If any of you is interested to know the fundamentals behind this two trades, just email me at [email protected] and I will be happy to share the fundamentals with you.

Trade 4: Long CAD/CHF
If you look at your daily chart, you will notice a bullish divergence with the RSI as also this indicator breaking 40 to the upside after being in oversold area for a long time. On lower time frames the RSI is already in the overbought area so every pullback cad/chf will make is a good opportunity to enter long. On my daily chart, you will notice a local small resistance at 0.8000, which in my opinion will be broken. The first target is the 23.6% Fibonacci Level at 0.8200. Great risk reward in my opinion.
http://screencast.com/t/nSnhBRF8xEoK

Trade 5: Long AUD/CHF
Inverted H&S pattern on the daily chart indicates that the rate action might go up to the 38.2% Fibonacci Retracement. After today Glenn Steven’s speech (he is the RBA governor), I don’t think AUD/CHF will have any problem to break the 23.6% Fibonacci level in the 0.8240 area. In the next few weeks, I think 0.8550 is achievable for this pair. Add the carry-trade on this idea and the only thing you have to do is to look at your equity growing.
http://screencast.com/t/lKVJPEwBe

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Visit TradingFloorFx to see our top for the first month since we launched the Golden Dawn Fund. Our top 3 traders managed to close the month with 14 positive trades and only 3 negative. Can you do better? Why don't you join us? The strategy for this month is to buy EM currencies and the YEN. If you think you manage to find a few good entry levels to buy the EM or the YEN, we need you in our team. Hurry up!

Are you ready for the big event today? Here is what Goldman Sachs thinks about what ECB will do:

At Goldman Sachs, economist Sebastian Graves expects the Governing Council to ease policy modestly, with a small cut in rates and maybe some liquidity actions.

“Such measures will be largely cosmetic from a macroeconomic perspective, but help to avoid giving the impression of an indifference to low-inflation outcomes and a lack of concrete action following much dovish rhetoric,” he said in a note.

Personal note: last month when Mr Draghi prepared a hawkish speech for the press conference, at 08:00 AM (GMT) - as soon as the European markets opened - the EURO-BUND dropped almost 3000 pips. I even emailed you that day saying to switch from short euro to long euro but to be caution. That move in the EURO-BUND left me the impression that someone knew what Draghi will say hours before the press conference. Actually, during the press conference and after that, the EURO-BUND moved only a few pips. Today I don't see the same reaction in the EURO-BUND.

Conspiracy Theory: it's wrong to trade on conspiracy theories but it's also wrong to unveil ur speech to some investors and to bang many others. Draghi worked for Goldman Sachs, Mark Carney worked for Goldman Sachs and some others CB governors also worked for Goldman Sachs. Strangely (or not) Goldman Sachs is the bank with the highest number of political connections in the world. The last and the best example is the CB governor of Bank of India. He also worked for Goldman Sachs and as soon as he took the chair in the Bank of India, investors, switched from short INR to long INR, despite the fact that India did nothing special to change the outlook for the economy in such a short time since the new governor came in. The moral of all this: the Goldman Sachs interferes in the domestic business and knows the next move of the CB.

I am inclined to believe that Sebastian Graves knows something and I will position myself SHORT the EURO before the ECB press conference. Small position and with a 50 pips SL. Caution is recommended even for today. As soon as I will hear the "magic words" from the Draghi's mouth I might add more short positions. I will cover LIVE the ECB press conference, on TradingFloorFx chat room, starting with 13:30 GMT. Don't miss it.

While most of us were enjoying the weekend, Mario Draghi – the ECB president – hold a press conference in Washington DC. The key of his statement was that a further strengthening of the euro exchange rate would require more loosening in the European Central Bank's monetary policy to keep the overall policy stance as accommodative as it is now. This is the reason for the today’s eur/usd gap.

As usual, he gave no numbers, no thresholds to guide us to understand how much is too much. "I have always said that the exchange rate is not a policy target, but it is important for price stability and growth. And now, what has happened over the last few months is that it has become more and more important for price stability," Draghi said at that press conference. Further strengthening of the euro exchange rate means eur/usd at 1.3900? Or 1.4100? Or even higher?!?

One thing is for sure: the ECB’s “threats” are too much. In the last 6 months, the ECB did nothing when they met to discuss monetary policies but in the last 60 days, they are doing “whatever it takes” to drag the euro down. The problem is that no one believes their words and the investors want facts. The question is if the ECB affords to do nothing again at their next meeting. The credibility of the board members as of his president will suffer much more than the single currency and from now on, any forward guidance will be toilet paper for investors, if Mario Draghi, Benoit Coeuré, Vitor Constancio, Yves Mersch and Peter Praet will continue to “threaten” the markets without doing anything.

On 30 of April, the European CPI flash estimates will be released and any reading at or below 0.5% has to trigger the ECB’s action at their meeting, one week later, on May 8.

On May 1st, I will organize a free webinar of 90 minutes where I will try to anticipate the ECB’s move and how to position ourselves in the market. The webinar’s topic will be “Trading opportunities for May” and will have the following structure:

· European inflation, ECB monetary policies and how to trade the euro/usd– 15 minutes
· How to trade the fundamentals – 15 minutes
· Other trading opportunities – 30 minutes
· Gold & Silver – what are the drivers of these commodities and how to trade them – 15 minutes
· Question & Answers – 15 minutes

If you would like to join the webinar, please send me an email at [color=#404040][email protected][/color]. You will receive an email with the link for the webinar, 1h before the webinar starts.

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