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EURUSD Discussions

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  Ammeo said:
Even if the low inflation prints in the Eurozone and UK arent low enough to exactly inspire action from their respective central banks, there will still be similar money flows to those current coming out of Japan. As the USA starts to look better, and rates rise across the curve rise globally as we saw over the summer... US rates will rise faster than UK and Eurozone rates, becuase UK and Eurozone rates will remain anchored by the very low inflation.

 

Money will go to where the rates are the highest for the lowest risk... USD.

 

I'm looking at the next week with RBA, ECB and BOE coming with interest rate decisions and the ECB seems to be the one that should point towards more easing (not rate cut, but dovish language at least).........watch out for LTRO's or negative rates discussions.......reason for that is loans to corporations to minimum in last 3-4 years...means tough business environment and points towards slow growth, if any......

 

does this mean eurusd will head down on the long run? not really.........but curious about how the ECB will act next week.

 

TW

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  tradingwizzard said:
I'm looking at the next week with RBA, ECB and BOE coming with interest rate decisions and the ECB seems to be the one that should point towards more easing (not rate cut, but dovish language at least).........watch out for LTRO's or negative rates discussions.......reason for that is loans to corporations to minimum in last 3-4 years...means tough business environment and points towards slow growth, if any......

 

does this mean eurusd will head down on the long run? not really.........but curious about how the ECB will act next week.

 

TW

 

eurusd is not defiitely not heading down but the probabilities are highly likely.

USD is a much much stable currency and US is a much stable economy than eurozone.

If i look at the chart i already see eurusd in over-bought zone with traders buying it i anticipation of a euro bailout or low unemployment figures but their possibility is also highly unlikely.

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i found a very nice article on the net which completely sums up the euro..

 

no links please........say it with your own words......this way you will understand it better, and we too.

 

TW

Edited by tradingwizzard

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  Ammeo said:
eurusd is not defiitely not heading down but the probabilities are highly likely.

USD is a much much stable currency and US is a much stable economy than eurozone.

If i look at the chart i already see eurusd in over-bought zone with traders buying it i anticipation of a euro bailout or low unemployment figures but their possibility is also highly unlikely.

 

I am looking at a totally opposite picture........usd in big trouble: debt ceiling, qe, raising interest rates (in your dreams!!!), etc.....so lower all over the board......however, there is no straight line so we need a correction.....I will buy eurusd dips

 

TW

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This should be a good week to evaluate the EURUSD as its hasn't been able to clearly break the 1.36 level. I think dropping well below 1.35 is very realistic with the amount U.S Data that will be released. The big question is, will the data only influence short term on the pair or will the trend reverse going on to next week. On the down side 1.3465 will be a key level to look out for at its a sturdy support & a clean break above 1.36 should push it back to Oct highs at about 1.38 in the near term.

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It seems ECB keep pressuring to implement taper in upcoming FOMC.

If US do so, eurozone blabbers will come out to add more firepower into bear to protect next support.

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I really don't like the eurusd at these levels but markets have their way into pushing things to extremes so I wouldn't be surprised to see it moving a bit higher.......NFP today will clear some fundaental uncertainties though

 

TW

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After NFP and "mixed" reaction to it we have quite unclear situation...

The main support for now is 1.3628, as long as price is above it I expect slow upward movement. Next strong resistance is 1.3803, but I really do not expect E/U will touch it on Monday.

I will go Long around 1.3677 with SL 1.3655 and TP 1.3733, but I will move SL to BE ASAP (max 30pips).

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Market is gearing up for possible QE tempering in Jan 2014

Once this is done both Euro and Cable will come down to parity or closer to true worth.

To me irregardless of Feds actions Euro is heading to new crises with Greece,Spain,Italy particularly with Greece which is due to replay 10b debt but so far all the austerity measures made whole lot of people unemployed and mad.Something ugly is going to happen.

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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.

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  Ammeo said:
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.

 

how about a QE from the ECB?

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Do you guyzz think it could reach 1,36? I think 1,356x could be reached in the next weeks (it's the mid between the 3-months low, 1,3295 touched on Nov 7th, and the 3-month high, Oct 25th's 1,3832)...

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  Ammeo said:
If the 1.37586 isn't breached (0.50 Fibo from 1.3624) in my opinion it would go for 1.3892 again to test

So A nice Long here on EU with tight SL

 

nahh....bearish eurusd going into the 2014 but what the heck........year's end flows are really impressive this year.......anyways, it's all about the eurjpy in my opinion

 

TW

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  tradingwizzard said:
nahh....bearish eurusd going into the 2014 but what the heck........year's end flows are really impressive this year.......anyways, it's all about the eurjpy in my opinion

 

TW

 

Yes offcourse its bearish as a whole but the way it surged to that 1.38 zone was impressive, technically may get another upward rush be it for just a small duration like for a couple of days or so...

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  tradingwizzard said:
nahh....bearish eurusd going into the 2014 but what the heck........year's end flows are really impressive this year.......anyways, it's all about the eurjpy in my opinion

 

TW

 

BTW The median of calls/puts is around 3600, with low 3300 and high 3950. So most people see 3950 as the top of this bull trend. Options traders at trading desks only see low 3300 in Jun 2014.

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The weekly finale is the always unpredictable NFP report. This month it is expected to come in at 195K new hires. We normally wish to wait for the NFP and then look for a trade, but this is a busy data week. With the possibility that ECB President might be forced to act because of the deflation threat, we are inclined to sell the euro versus the USD in the 1.37 area. If the trade does not show profit ahead of Friday it will be best to liquidate, and wait for the NFP report. As always, manage your money.

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  Ammeo said:
closed all my EU shorts at 3560

8 of them 11% gain on account

 

really nice move, congrats

 

eurusd bears must scratch their heads as euro back above 1.36......Draghi was a pain in the A today but markets in the end realized we're not trading here the Euro, but the eurusd as a pair......so sell the usd has been the theme as we're back at the highs

 

TW

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I see further downward pressure on the EURO.

 

There are also euro-skeptics that doubt the ECB has done the best it can to stoke their recovery. In the Telegraph today Ambrose Evans-Pritchard had some interesting comments:

 

"Mario Draghi removed the risk of an Italian and Spanish debt collapse in July 2012 by securing Berlin's support (through Asmussen) for an emergency backstop. People talk of this as if it were magic. All that happened is that the ECB stepped up to its responsibilities as a lender-of-last resort, as it should have done from the beginning.

 

But monetary policy remains passive and contractionary, arguably incubating another nasty surprise. Broad M3 money has been flat for six months. Business lending has fallen by

3.9pc over the last year. There will less fiscal drag in 2014 as austerity eases, but the eurozone is doing almost nothing to generate its own internal growth. Europe is once again relying on the rest of the world to pull it along, and the world may not oblige.

 

.....Far from building a base for recovery, the eurozone has wasted the last five years of global expansion holding together a dysfunctional currency union, lurching from crisis to crisis. The result has a been double-dip recession and a worse macro-outcome for the same European states than in the comparable years from 1930 to 1935.

Europe is one external shock away from a full-blown deflation trap, and one recession away from an underlying public and private debt crisis. Nothing has been resolved."

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