Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
Yes, had two quick longs for small profits, but I'm very uneasy going long - therefore rather small profits although I got in first a few ticks below 1.2130 . 
FOMC decisions always gives me jitters - not because of the outcome - but because of the markets ... they go pretty wild. Like always - there are 'mixed signals' in the market.
Your day position sits way better today. What is your target ?
[14:41 GMT 20th Sept] The intraday slide from 1.2175 to 1.2126 looks to have come up just shy of the stops, found immediately under the September the 16th low of 1.2121, for now. Technically speaking it had ignored the chart implied oversold levels for some time but they are now correcting and the bounce is likely to find a home around the previous pivot point of 1.2150. Ahead of the FOMC, 25bps are now being priced in by the market but the December meeting is now throwing up an unusual amount of risk aversion. With the November election and a Dec hike likely, any degree of politicization to leave rates unchanged could leave the market feeling a degree of manipulation. IMF Managing Director Rato has been on the wires recently claiming the US need to correct the US current account deficit or the USD will fall from its current levels, according to a Reuters report. The market is therefore trying to, albeit unsuccessfully, sell the dollar on the trade and current a/c figures but has not had any success sustaining the lower levels amid rising US interest rates at the short-end and demand for liquidity ahead of the FOMC.
[14:40 EUR/USD: Ticking Toward Resistance Despite Stock Rally, Oil Dip] Boston, September 20: It"s an odd day today. The dollar is trading nearly inversely with the US equity and oil markets today. The S&P has bounced about 7 points from its lows and oil has given back virtually all of its early gains, but the greenback is dipping in its range. EUR/USD should find resistance at the 1.2150/55 level. That level provided a strong base this morning and trendline resistance drawn off of 1.2220 come in there as well. Further resistance is at 1.2175 if broken.
[08:39 GMT September 20th] [EUR/USD] Euro CTA's selling around the 1.2160/65 region.
FOMC decisions always gives me jitters - not because of the outcome - but because of the markets ... they go pretty wild. Like always - there are 'mixed signals' in the market.
Your day position sits way better today. What is your target ?
[14:41 GMT 20th Sept] The intraday slide from 1.2175 to 1.2126 looks to have come up just shy of the stops, found immediately under the September the 16th low of 1.2121, for now. Technically speaking it had ignored the chart implied oversold levels for some time but they are now correcting and the bounce is likely to find a home around the previous pivot point of 1.2150. Ahead of the FOMC, 25bps are now being priced in by the market but the December meeting is now throwing up an unusual amount of risk aversion. With the November election and a Dec hike likely, any degree of politicization to leave rates unchanged could leave the market feeling a degree of manipulation. IMF Managing Director Rato has been on the wires recently claiming the US need to correct the US current account deficit or the USD will fall from its current levels, according to a Reuters report. The market is therefore trying to, albeit unsuccessfully, sell the dollar on the trade and current a/c figures but has not had any success sustaining the lower levels amid rising US interest rates at the short-end and demand for liquidity ahead of the FOMC.
[14:40 EUR/USD: Ticking Toward Resistance Despite Stock Rally, Oil Dip] Boston, September 20: It"s an odd day today. The dollar is trading nearly inversely with the US equity and oil markets today. The S&P has bounced about 7 points from its lows and oil has given back virtually all of its early gains, but the greenback is dipping in its range. EUR/USD should find resistance at the 1.2150/55 level. That level provided a strong base this morning and trendline resistance drawn off of 1.2220 come in there as well. Further resistance is at 1.2175 if broken.
[08:39 GMT September 20th] [EUR/USD] Euro CTA's selling around the 1.2160/65 region.
Quote from Gringinho:
Yes, had two quick longs for small profits, but I'm very uneasy going long - therefore rather small profits although I got in first a few ticks below 1.2130 .
FOMC decisions always gives me jitters - not because of the outcome - but because of the markets ... they go pretty wild. Like always - there are 'mixed signals' in the market.
Your day position sits way better today. What is your target ?
I don't have a target. I'm trailing the position for now as long as the pullbacks are in low volume. My stop is now couple of ticks over my entry so I'm smooth sailing for now
Tomorrow, after the FOMC decision, I'll be very careful. Last time, we had 20-30 pip fast moves up and down for a while it was crazy.
Chinook
We'll see if it can surpass 1.2155 again ...
I usually get out close to these stalling/testing levels when I've traded a bounce or similar - but I'm very eager to have every trade profitable.
As I write the spot breaks 1.2155 ..
.. and breaks much stronger than I would have thought too ...
Then we'll probably see it pass again, or things will be set up for a rough tomorrow. This was possibly some cross-effects ?
(which would make a dip below the pivot even more possible I think)
[15:46 EUR/USD: Hourly Trendline Overcome As Shorts Cover] Boston, September 20: EUR/USD overcame its hourly downtrend and tripped a few stops on the rise back above the 1.2150/55 area, but few express much conviction for any sustained movement one way or another until the Fed is out of the way. Rumblings of an ECB hike later this year continue to make the rounds with Morgan Stanley today forecasting a move in November or December. European economic data remains quite
soggy, so expect ECB hikes to be scattered rather than in succession like those of the BOE or Fed, and of questionable benefit for the EUR. 1.2175 is resistance intraday. More small stops are eyed above that level, the overnight high. 1.2220/25 is resistance beyond that.
[15:28 EUR/JPY: Short-covering Seen On Break Above Ichimoku Cloud Base] San Francisco, September 20th: EUR/JPY has seen some short-covering emerge on the break back above the base of the Ichimoku cloud base of 133.55. EUR/JPY has rallied to 133.73 as a result but with offers still seen at 134.00 and higher at 134.50. The top of the Ichimoku cloud should offer resistance at much higher levels of 134.92. Providing support is the continued rise in oil prices which is seen weighing on JPY. Crude is above $46 a barrel with concerns over the cessation of some Yukos deliveries as well as the impact from the hurricanes.
[15:04 EUR/USD: More Downside Risk Coming From Options Market] New York, September 20: With 1-month EUR/USD vols falling to a fresh 21-month low at 8.25%, there are signs that the market may be getting overly confident of further spot range trading. Central banks, which have spearheaded the use of double-no-touch options over the course of the past two years, are at it again. However, this time, they are selling DNTs with 1.1850 and 1.1900 downside strikes against 1.2400 and 1.2500 upside strikes respectively, expiring in early December with large payouts. After watching EUR/USD meander in uneventful ranges for the past 5 months, the central banks seem to be preparing for a breakout. There are signs that the slowing growth in Europe and reactive ECB are directing real money flows out of the Eurozone. For the first time in months both US and Asian equity markets, seem to be heavy favorites of asset managers at the expense of European markets. Even those favoring European bonds have a tendency to hold them on a fully hedged basis recently. Also note that central banks that are natural buyers of EURs have been absent on the recent drop. Take into account IMM positioning data that shows substantial EUR longs and the seeds are sown for a sharp drop in the weeks ahead. We favor any strategy that shorts European currencies and are particularly enamored with those that are long Asian currencies as well. The currencies that made moves today in that vein are EUR/AUD and CHF/JPY. The former broke below a 1-month trendline at 1.7390 and the latter below a 3-week trendline at 86.15. They also go lock step with out scenario of slower European growth, better economic performance in Asia and subsequent asset flows to reflect those views.
Pennant formation proceeding toward its apex, with the mid-point of the pennant"s wide at 1.2220 being the pivot point since the beginning of the month. Intraday studies are beginning to rebound from oversold after prices failed to break Thursday"s 1.2120 lows, so a retest of the 1.2220-25 pivot point looks likely. Daily are bearish, so sell failures there.
I usually get out close to these stalling/testing levels when I've traded a bounce or similar - but I'm very eager to have every trade profitable.
As I write the spot breaks 1.2155 ..
.. and breaks much stronger than I would have thought too ...
Then we'll probably see it pass again, or things will be set up for a rough tomorrow. This was possibly some cross-effects ?
(which would make a dip below the pivot even more possible I think)
[15:46 EUR/USD: Hourly Trendline Overcome As Shorts Cover] Boston, September 20: EUR/USD overcame its hourly downtrend and tripped a few stops on the rise back above the 1.2150/55 area, but few express much conviction for any sustained movement one way or another until the Fed is out of the way. Rumblings of an ECB hike later this year continue to make the rounds with Morgan Stanley today forecasting a move in November or December. European economic data remains quite
soggy, so expect ECB hikes to be scattered rather than in succession like those of the BOE or Fed, and of questionable benefit for the EUR. 1.2175 is resistance intraday. More small stops are eyed above that level, the overnight high. 1.2220/25 is resistance beyond that.
[15:28 EUR/JPY: Short-covering Seen On Break Above Ichimoku Cloud Base] San Francisco, September 20th: EUR/JPY has seen some short-covering emerge on the break back above the base of the Ichimoku cloud base of 133.55. EUR/JPY has rallied to 133.73 as a result but with offers still seen at 134.00 and higher at 134.50. The top of the Ichimoku cloud should offer resistance at much higher levels of 134.92. Providing support is the continued rise in oil prices which is seen weighing on JPY. Crude is above $46 a barrel with concerns over the cessation of some Yukos deliveries as well as the impact from the hurricanes.
[15:04 EUR/USD: More Downside Risk Coming From Options Market] New York, September 20: With 1-month EUR/USD vols falling to a fresh 21-month low at 8.25%, there are signs that the market may be getting overly confident of further spot range trading. Central banks, which have spearheaded the use of double-no-touch options over the course of the past two years, are at it again. However, this time, they are selling DNTs with 1.1850 and 1.1900 downside strikes against 1.2400 and 1.2500 upside strikes respectively, expiring in early December with large payouts. After watching EUR/USD meander in uneventful ranges for the past 5 months, the central banks seem to be preparing for a breakout. There are signs that the slowing growth in Europe and reactive ECB are directing real money flows out of the Eurozone. For the first time in months both US and Asian equity markets, seem to be heavy favorites of asset managers at the expense of European markets. Even those favoring European bonds have a tendency to hold them on a fully hedged basis recently. Also note that central banks that are natural buyers of EURs have been absent on the recent drop. Take into account IMM positioning data that shows substantial EUR longs and the seeds are sown for a sharp drop in the weeks ahead. We favor any strategy that shorts European currencies and are particularly enamored with those that are long Asian currencies as well. The currencies that made moves today in that vein are EUR/AUD and CHF/JPY. The former broke below a 1-month trendline at 1.7390 and the latter below a 3-week trendline at 86.15. They also go lock step with out scenario of slower European growth, better economic performance in Asia and subsequent asset flows to reflect those views.
Pennant formation proceeding toward its apex, with the mid-point of the pennant"s wide at 1.2220 being the pivot point since the beginning of the month. Intraday studies are beginning to rebound from oversold after prices failed to break Thursday"s 1.2120 lows, so a retest of the 1.2220-25 pivot point looks likely. Daily are bearish, so sell failures there.
Quote from Gringinho:
We'll see if it can surpass 1.2155 again ...
I usually get out close to these stalling/testing levels when I've traded a bounce or similar - but I'm very eager to have every trade profitable.
As I write the spot breaks 1.2155 ..
.. and breaks much stronger than I would have thought too ...
Then we'll probably see it pass again, or things will be set up for a rough tomorrow. This was possibly some cross-effects ?
(which would make a dip below the pivot even more possible I think)
I went crazy last couple of weeks micromanaging my trades. Now I'm back to my older style, trying to ride intraday trends. This way , I dramatically reduce # of trades. And I have very minimal discretion to use. When I tried to ride the smaller ups and downs, I was initially successful but then self-beating caught up with me. Anyway, it's impossible to predict when a move would end. So as long as I cut my losers shorts, I'll be fine.
Chinook
I'm rather undecided if I'm going to mix my style with some longer term, as my 'gut feeling' on some of the smaller moves is quite strong, and I know that being wrong on the longer moves without a proper exit strategy hurts a lot with futures - from my ES trading.
Now, my 'current investigation' is if we're stalling here around 1.2165 on the december - 1.21700-ish on the spot, or we're turning into a 'day-trend' with further runs against stops -- or finally we're bee-boping in the ranges ... The 1.2175 area on the spot seems like a fine trade opportunity - when we didn't get any stalling around 1.2155.
[16:13 FX OPTIONS: EUR Vols Sinking Quickly, Traders Losing Hope] New York, September 20: With the FOMC on tap tomorrow, vols are sliding fast and many see the market continuing to trace out familiar ranges for weeks to come. Event risk is hardly on traders minds as 1-week vols drift toward 7.0% and the market feel comfortable that a well-telegraphed 25 bps rate hike will be seen. The tug-of- war between vol buyers and sellers has clearly been won by the latter in recent weeks and longs are close to throwing in the towel. The lack of EUR/USD downside strikes should signal that the favored direction of any move is lower for spot, but getting aggressive on positioning for such a move is difficult to justify. 1-month EUR/USD vols fell 0.25% to 8.25% and the Risk Reversal rose 0.05% to 0.1% favoring EUR calls. There were 1.2250 strikes that rolled off today and more talk of early December barriers is heating up. They are essentially 1.1850-1.1900 downside strikes against 1.2400-1.2500 strikes. The difference this time is that [central banks have been the sellers of these options] and not the buyers they usually seem to be. This indicates option vols, while at multi-year lows, may be a good buying opportunity. 1-month USD/CHF vols fell 0.15% to 8.9% and the RR fell 0.05% to -0.1% favoring CHF calls. 1-month GBP/USD vols steadied at 7.45%, despite spot falling after heavy UK selling. The RR steadied at -0.2% favoring GBP puts.
Gringinho,
Watch out for mixing styles/time-frames. I don't know about you but it completely screwed up my trading. I tried to mix 15-20 min time-frames with 4-5 hours and ended up with lot of conflicts and could haves should haves. I think bottom line is to have rigid plans. If you have two fuzzy plans like I did for different time-frames then it might just drive you nuts.
I'm not seeing too much danger with this stalling. I'm still trailing. The pullbacks still have low volume.
Chinook
Watch out for mixing styles/time-frames. I don't know about you but it completely screwed up my trading. I tried to mix 15-20 min time-frames with 4-5 hours and ended up with lot of conflicts and could haves should haves. I think bottom line is to have rigid plans. If you have two fuzzy plans like I did for different time-frames then it might just drive you nuts.
I'm not seeing too much danger with this stalling. I'm still trailing. The pullbacks still have low volume.
Chinook
Quote from chinook:
A trader after a bad trading day
hehe, I know that feeling ....I think we're headed back to 1.2150-ish area again on the spot, but towards the end of RTH on EuroFX I'm not sure what will happen ... not that much external noise to rock the boat either; just the usual energy concerns. We might just dabble off, and get some swings in the asian session, with the japanese fresh from their long weekend.
The current stalling makes the return down more probable, and the longer the stalling - the more probable because of FOMC.
I had some orders locked in the range, but the swings went shy 1 tick of both triggers, so I canceled to find new triggers, although the probability of a sharp down move is getting larger and larger as time passes - and failure of a follow-through for the rise becomes evident.
Chinook, my inclination would be to try and exit the trade close to the top of the stalling range when it gets there - what makes your exit ? Only the trailing stop ?
Regarding the exits. Yes, (when long) if the top of the range is tested on lower volume then I usually exit. But now, the bottom of the range is rising up so I have a feeling that we might spring up. It's quite fuzzy right now. I wouldn't get fresh long here but I'm still happy to trail my stop.
Chinook
Chinook