EURUSD

Hi,

Whatever you see on this site does not reflect the reality of the market. If all the parameters stay the same , EUR will keep going down.
there is absolutely no reason to buy it with a serious divergence between monetary policies.

There’s a 60 percent likelihood the U.S. central bank will raise the rate to at least 0.5 percent by July 2015, futures trading data compiled by Bloomberg showed. That’s up from a 49 percent chance a month ago.

Here is the latest REUTERS POLL done on the 15th September:

There is a one-in-three chance U.S. Treasury yields will trade at or below where they are now in a year despite broad expectations that the Federal Reserve will hike rates by mid-2015, according to strategists polled by Reuters.

The poll also found that major sovereign bonds will remain in favour with investors, despite record low yields, partly because there are no clear expectations for inflation to take off in any of these economies.

U.S. Treasuries have rallied since the beginning of the year, pushing 10-year yields down by 60 basis points - a totally unexpected move for most fixed-income strategists when polled at the start of the year, as most thought yields would rise.

But having been wrong-footed once, they have now tempered their views.

The latest Reuters poll of more than 50 strategists suggested the U.S. 10-year note will yield 2.74 percent by the end of December, just over 10 basis points up from Friday's close of 2.61 percent. Yields are then expected to climb to 3.20 percent in a year.

The Fed begins a two-day meeting on Tuesday at which it is widely expected to make changes to its policy language, tempering slightly its dovish tone as it winds down its bond purchases program.

While most strategists expect the Fed to raise rates in the second quarter of next year, they gave a 30 percent chance that 10-year yields will not rise from their current rate in a year.

"There is a pretty good chance – maybe 75 percent chance - we end up below 3 percent by the time we get close to rising rates. Rates going up is more a grind higher rather than the sort of price action we had last year," said David Thielke, fixed-income strategist at Nomura.

"If you look at global fixed-income in general, the European outlook is so dismal and the Russia-Ukraine problem is not solved. There are a lot of risks, so people are happy being long even when it is already so rich," Thielke added.

Yields on 10-year German Bunds have dropped almost 100 basis points this year - even more than their U.S. counterparts - to 1.07 percent, due to dangerously low inflation.

Unlike the Fed and the Bank of England, the ECB is not likely to raise rates anytime soon and will only get started on asset-backed securities (ABS) purchases programme next month.

The Organisation for Economic Cooperation and Development (OECD) cut its growth forecasts for major developed economies on Monday, urging more aggressive ECB stimulus to ward off the risk of deflation in a subdued euro zone.

A Reuters snap poll conducted after the ECB meeting last week gave a 40 percent chance of the bank buying sovereign bonds, as the Fed and the BoE have done.

Strategists see a negligible rise in German bund yields by December but forecast them rising to 1.45 percent by September next year, almost 50 basis points higher than they are now.

A few forecasters said they may rise a lot more on expectations the ECB's planned ABS purchases and another round of long-term loans, this time on condition that banks lend the cash on, will be enough to push up inflation.

"The reason behind that is that at some point over the next 3-6 months we are going to see inflation and output begin to turn around," said Luca Jellinek, head of European rates strategy at CA-CIB, who forecasts the yield to jump to 2.10 over the coming year.

"The main impact of that action (sovereign bonds) would have been to lower yields but they are already low - I don't think a central bank can really decide how (fast) an economy can grow. It'd be nice if it could, but it can't," Jellinek added.

UK Gilt yields, meanwhile, are expected to rise along with a steady improvement in the economy and expectations for an interest rate hike from the BoE by the middle of next year.

Here is the follow up:

The U.S. Federal Reserve will likely tighten its monetary policy in the second quarter of next year against a backdrop of stronger economic growth and building inflation pressures, a Reuters survey showed.

Economists gave a 55 percent probability of the Fed moving away from the 0-0.25 percent range and lifting its benchmark overnight lending rate in the April-June quarter of next year.

That was also the median forecast from around 70 economists, with most focusing on the June 16-17 policy meeting.

The survey showed more economists are betting on the Fed to move earlier than previously thought, similar to the findings of a Reuters poll of Wall Street's top bond dealers published last Friday.

"The economy is improving and job creation is quite strong," said Thomas Costerg, a U.S. economist at Standard Chartered Bank in New York. "The main risk is that the Fed starts earlier, but goes slower."

The chances of tighter monetary policy, after the Fed has held rates near zero for more than a decade, increased to 75 percent in the third quarter and 90 percent for the fourth quarter of 2015, the survey found.

Most analysts say the U.S. economy has entered a phase of sustainable firmer growth, marked by relatively strong job creation that should help lower the unemployment rate to a level with which the Fed is comfortable.

Employment has expanded by an average of 215,375 jobs per month so far this year and the unemployment rate has declined by half a percentage since January to 6.1 percent in August.

"We are looking for growth to stay about 3 percent for the rest of the year, which I think will be very encouraging as it would narrow the output gap a little bit," said Gennadiy Goldberg, a U.S. economist at TD Securities in New York.

The survey forecast the economy expanding 2.1 percent this year, with growth accelerating to 3.0 percent in 2015. With activity gaining steam, price pressures are expected to pick up, lifting inflation above the Fed's 2 percent target next year.

The poll forecast core consumer prices, which exclude food and energy, bumping against the Fed's inflation goal in the fourth quarter of this year and rising slightly above the target thereafter.

The core Consumer Price Index was seen averaging 2.1 percent next year and 2.2 percent in 2016. The Fed tracks an index that has been running lower than the CPI. However, economists also expect this index to rise towards the target.

"The strengthening economy will modestly increase inflationary pressures," said Scott Hoyt, senior economist at Moody's Analytics in West Chester, Pennsylvania. "We are looking for most of the inflation measures to be near or a bit above 2 percent next year."

Price will hit 1.28407 very soon.

There is nothing pulling the eur/usd down.

that's all there is in the bull tank?

after .28407what next ? but the euro has taught me one thing just becoz it has done down doesnot mean it cannt go downer !

Hey buddy, i advise you stay off the eurusd thread. they are quite hostile to secret weapon traders.

some say there is an underlying bull trend...

missed this last week on the ej.. i should have watched the ej like the e/chf. i dont know if the eu will bounce or not.. e/chf has yet to test 1.2 and the eu 277xx or close 2802... i missed the ej being in the 141.02/141.52 area. both e/chf and the yen pairs are heavily manipulated. we know the line for the e/chf, the ej is more a guess. my guess on the ej if it hasn't already happened is to watch the retest of 141.02/141.52 area.. dont discount i may be off a few for slippage. its crazy to bet against the boj or the swiss.. so watch them at their own game, watch to see if they bet against the market or see if they have given up. market wise i see a tech reason for the ej to be topping. i may be wrong so its free to watch. if it does a 126.x print is a min expected. ej falls will make life harder on the swiss 1.2 and eu 272x and so forth deeper.. pre 911 has deep targets lower then 2001 levels.. i say 911 because that was the start of much printing post 911..now it seems the ecb will start a printing cycle.. the same with the larger energy cycle of 40 years reversing. ez on the short end of that stick too.

later

mmmh. you are saying there's a small calf trend somewhere, that's growing to be a bull trend ?

EUR/USD downtrend next week?

You never know what's going to happen...

Never buy in a downtrend... Just use your stategy for sell trades... You have to wait for the bounces to play out... Thats one concept 90% of traders cannot do... Wait!

Wise words.

So my bank blocked my card for Internet transactions because I used it on Forex site. Sucks to live in a 3rd world country!

Yha, but on the bright side you can go up north and buy a truck full of guns and ammo for 5Ks

next time use a prepaid card.its the safest way to pay for forex if your bank is still in the stone age !

very true indeed.