EURUSD

I want to short a European bank that borrowed in USD a couple of years ago and lent out in Euros preferably at fixed rate. Do you know which one was the smartest?

Looks like momentum is starting to pick up after a pretty nice sell off past few days... waiting for another long entry..

You never know. Setting my sl at 1.06331

Good luck... i get the feeling a bit more pain is in store for longs..... but doubt it will last.

Written by Jim Mellon
I am writing this in my flat in Berlin, looking out over the Reichstag, scene of heavy fighting at the end of the last war. It’s a beautiful morning and the building, topped by Norman Foster’s remarkable cupola, is now the crucible of a verbal war raging around the extent of German subvention of the poorer members of the Eurozone, notably Greece.
This argument is not just academic, and while the posturing of the ludicrously attired ersatz economist Greek finance minister has a comic element attached, the consequences of this spat are anything but funny.
Literally, the whole of the worlds currency dynamic, the future trends of global trade, and the allocation of portfolios worldwide are being shaped by this crucial debate. Germany has absolutely no need of a weaker euro, and indeed most of Europe doesnt need one either. But it has got it, and while in my last few articles I have emphasized the need to be short the euro against just about anything that moved, the extent of its fall a direct result of the aforementioned debate is now overdone.
When Mario Draghi announced his QE programme some months ago, in the teeth of German reluctance, if not downright resistance, he signalled a huge change in the character of the
European currency union.
Now that the programme has started, the inevitable consequence of a collapsed euro has occurred. The euro has lost over a quarter of its value against the rampant dollar in the past year; it has also lost nearly 20% against the pound, and is now undervalued on nearly every indicator I look at.
Meanwhile, Eurozone interest rates, particularly at the core, are at record lows. The ECB has been buying German bonds, largely because there are more of them, with the intention of driving yields across the Eurozone down. The general hope is that this will force banks and others, unimpressed by the derisory (or even negative) yields on cash, to lend to productive causes.
The extent of QE as announced will be 1 trillion over eighteen months, and its certainly a large figure. Stocks in Europe have soared, as investors believe that the declining euro will boost earnings, QE will revive growth, and dividends on stocks are much more attractive than bond coupons.
So far, so good. But there are tremendous problems with the ECBs approach. First, Europe, which overall runs a huge trade surplus (6% of GDP) with the rest of the world, doesnt have a balance of payments problem. Germany suffers from anaemic domestic demand, France and Italy have sclerotic economies, and the peripheral economies have already undergone massive internal devaluations characterised by high unemployment and collapsed domestic demand. A weak euro will do little to encourage exports but might crimp imports, further adding to the inevitable savings glut that comes from huge trade surpluses.
One of the consequences of QE, meanwhile, is to distort the allocation of capital, which is swirling around in government bond markets and not finding its way out of the still undercapitalised banking sector in Europe to the SME sector, which is where the money is needed. The big multinationals can meantime borrow at near government rates, but its not them that need money its the small, job creating businesses which continue to be squeezed all across Europe.
That is why there is no productivity growth in Europe (or for that matter in the UK, the US or in China, all exponents of QE as well).
Capital is not being properly allocated, and while growth is ticking up slightly, to about 1% across the Eurozone, it is still at a derisory level which will not be significantly boosted either by the euros weakness or by QE. In my opinion, what Europe needs is a concerted effort to boost growth by cutting taxes.
Thats not going to happen and that takes me back to my view of the Reichstag. The Germans are very reluctant participants in QE, and are not keen on the already evident consequence of a debased currency .The idea of a federalised European tax system is a leap too far for the populist press in Germany, already highly accomplished in railing against the feckless Southerners sucking German taxes down to their deckchairs and tavernas.
http://www.masterinvestormagazine.co...ag-300x193.jpg
So what do we, eternally engaged in the hunt for investments that make a profit, do in these circumstances?
Firstly, although the euro/dollar rate will be very volatile, and indeed the euro/sterling rate as well, I think both are either at or close to the bottom.
So and here comes a big step for me, so long a euro bear I would close out euro short positions. I am not sure on European stocks, where foreign buying has been particularly evident. On the one hand, they arent particularly cheap, and the Euro banks still need to raise more capital; on the other hand, there isnt much for, say, Germans to invest in when yields on bank deposits are so low. I am of the view that the European stock markets, now the market du jour, are probably best avoided until it becomes clear that QE doesnt really work in Europe, at which point there may be a correction.
There will be no great European renaissance as a result of these policies; sadly, I think Europe will limp along at best.

EURUSD
Price is bouncing off H4 Bfly 1.27 extension , resistance at 1.0729 and 1.0788 + WS1.

Any chance of this going back to 1.075?

nope

Why?

Coz I am SHORT

Oh haha

Round 1, let's fight!

all i see for now is some 671 noise...ive closed my 642 long at 680...good luck...i will wait for 1.0 before trying any serious long... i see only ruins...

Hi everybody, this is my intraday strategy, good luck.

so maybe you'll have to wait until end of the year with long pos. .

For today we might have a tight range between 1.0649 and 1.0683...but since it's freaky friday you never know.

If bears take 1.0649 the next levels could be 1.0610 and 1.0583 according to my charts

Good morning - :-)

1,0702 LONG: TP - 30 pips, SL - 40 pips
1,0649 SHORT: TP - 50 pips, SL - 40 pips

Pendings set, I am gonna to bed

Last 10 days

break of 0685 could take the price to 0700/0720.

We're at the level when Dragster said that cheap Euro is in EZ's best interest...

Okay, that cracked me up a bit... (esp. the "sigh")

i wanna sell.. but i wonder if i shld sell now...