But short Eur/USD is the same as long USD (given Euro constant). Do you mean long Eur/USD?
Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
But short Eur/USD is the same as long USD (given Euro constant). Do you mean long Eur/USD?
I see most FX dealers do options etc. too.
[13:58 FX OPTIONS: EUR/USD Another Large 1.2250 Expiry Tomorrow] London, September 21: There is another large 1.2250 plain-vanilla option rolling off at the NY cut tomorrow (Wednesday, 14:00GMT), alongside a 1.2260 strike. 1mth implied volatility, meanwhile, has eased off its earlier session high of 8.55/8.75, with spot"s failure to extend north through the 1.2300 exotic barrier level helping weigh. Gain consolidation from yesterday"s 21-month low of 8.2/8.4 is the big-picture story.
<pre> [FXO IMPLIED VOLS]
================================================================================
[ EUR/USD USD/JPY GBP/USD USD/CHF AUD/USD ]
1 WK 8.1 7.5 7.4 9.0 9.85
1 MO 8.6 8.3 7.65 9.35 10.8
2 MO 9.25 8.6 8.2 9.9 11.25
3 MO 9.45 8.6 8.4 10.2 11.25
6 MO 9.85 8.7 8.8 10.55 11.55
1 YR 10.15 8.7 8.95 10.85 11.8
[ EUR/CHF EUR/JPY EUR/GBP GBP/CHF USD/CAD ]
1 WK 3.15 7.85 5.1 5.6 8.0
1 MO 3.15 8.45 5.6 6.25 7.85
2 MO 3.35 8.8 6.0 6.55 7.8
3 MO 3.5 8.9 6.2 6.9 7.7
6 MO 3.75 9.05 6.65 7.3 7.7
1 YR 3.95 9.25 6.85 7.5 7.7
[LAST UPDATED 13:43 GMT September 21st 2004] </pre>
[14:28 EUR/JPY: Model Funds Continue To Buy Cross] San Francisco, September 21st: EUR/JPY continues to garner support from model and momentum funds following technical signals and ignoring fundamentals. More model fund buying has been seen in the last few minutes, shifting from short to net long positions. Traders now say that the model funds will be forced to sell on a break under 134.00 and 133.80. The cross holds at 14.81/85 with multiple resistance in the 135.00/10 area from prior tops, from the trend line since April and from the Ichimoku cloud top at 135.04.
[14:32 EUR/USD: US Yield Differentials Contract Again] Boston, September 21: US interest rate differentials are dwindling versus the EUR once again, drifting down to 9 bp in the 10-year maturity, levels we tested late last week. Assuming the Fed keeps the outlook for future rate hikes relatively murky this afternoon -- a safe bet-- spreads should remain under pressure and be a drag on the dollar. If the Fed signals hikes in November and again in December, as former Fed Governor Gramley forecasted this morning, look for differentials to widen in favor of the dollar. EUR/USD trades just above 1.2250 with short-term specs saddled with longs. Rumors of European and Asian CB selling on the rallies brought the buying binge to a screaming halt early in the session. Risk is for small stops in the 1.2245 area to be washed out before EUR/USD settles into a pre-FOMC range.
Try this site for more FX options:
http://www.forex-options.com/
I feel like it's a giant scam personally due to the limited options they allow you to purchase and you can't sell them so......
I'm not too courageous this (very late) morning and am doing very fast scalps - 2-4 ticks. One short and a few longs.
Listening to The Future Sound of London helps offset the UN speech and other noises around ...
I'm at kind of a loss with what to do before the dust settles after FOMC - but will be on the lookout for some quick scalps.
edit: some theories from Thomson ...
[15:24 EUR/USD: New Theories On Central Banks Forex Actions] New York, September 21: There are a few theories on why the central banks, especially those of China and India have been so proactive in keeping forex markets stable. The theory goes that the Asian central banks are happy with the current level of dollar reserves after such a large shift into the EUR in 2002 and 2003. It goes on to include selling EURs on rallies as the dollar value of EUR holdings rises, and buying on dips to rebalance underweight positions and to translate future trade surpluses into the present currency mix. It makes the central banks trade like they own synthetic long gamma positions and gives them a reason to keep currency prices in a narrow range. That may last for sometime longer, but no entity is able to control the markets for long and the coiling price action suggests a breakout is possible. We favor the downside for EUR/USD in the big picture with the reactionary ECB, current investment outflows from the Eurozone, IMM positioning data and lack of downside option strikes on the market"s books. There are plenty of stops from option barriers between 1.2300/50 and they may need to be taken out before another sustainable decline is possible.
Listening to The Future Sound of London helps offset the UN speech and other noises around ...
I'm at kind of a loss with what to do before the dust settles after FOMC - but will be on the lookout for some quick scalps.
edit: some theories from Thomson ...
[15:24 EUR/USD: New Theories On Central Banks Forex Actions] New York, September 21: There are a few theories on why the central banks, especially those of China and India have been so proactive in keeping forex markets stable. The theory goes that the Asian central banks are happy with the current level of dollar reserves after such a large shift into the EUR in 2002 and 2003. It goes on to include selling EURs on rallies as the dollar value of EUR holdings rises, and buying on dips to rebalance underweight positions and to translate future trade surpluses into the present currency mix. It makes the central banks trade like they own synthetic long gamma positions and gives them a reason to keep currency prices in a narrow range. That may last for sometime longer, but no entity is able to control the markets for long and the coiling price action suggests a breakout is possible. We favor the downside for EUR/USD in the big picture with the reactionary ECB, current investment outflows from the Eurozone, IMM positioning data and lack of downside option strikes on the market"s books. There are plenty of stops from option barriers between 1.2300/50 and they may need to be taken out before another sustainable decline is possible.
Here is the August 10th Fed statement. With a 25 basis point hike so priced in, I think people will be focusing on changes in the statement. Of course it may not change much; so today's release might be a non-event.
Release Date: August 10, 2004
For immediate release
The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1-1/2 percent.
The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors.
The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters are roughly equal. With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.
In a related action, the Board of Governors unanimously approved a 25 basis point increase in the discount rate to 2-1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
2004 Monetary policy
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Last update: August 10, 2004
Release Date: August 10, 2004
For immediate release
The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 1-1/2 percent.
The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors.
The Committee perceives the upside and downside risks to the attainment of both sustainable growth and price stability for the next few quarters are roughly equal. With underlying inflation still expected to be relatively low, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E. Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.
In a related action, the Board of Governors unanimously approved a 25 basis point increase in the discount rate to 2-1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
2004 Monetary policy
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Last update: August 10, 2004
People still in bad trades now can get nasty suprises ...
I believe in stopping trading if you don't have good exit strategies when getting this close. We can see the spot dealers hitting stops right now, while the futures remains more calm - another good reason to use them and not spot.
Now it's time to let the scrutinizing of wordings pass it's time ...
The support at around 1.2259 on the december has been pretty strong, and we could see how they laid a strong bid and moderate asks at just this level. That made for several mini-trades for those on 1.2259/60. It seems to take forever for this bear-hug block to go away ...
End of RTH is also nearing, so one got to consider that in sizing too.
[17:04 EUR/USD: Oil Rally Muddies Fed Picture] Boston, September 21: The recent rebound in oil prices helps muddy the waters for the Fed, making a tough call even tougher. The Fed views high energy prices as a drain on the economy and could cause them to refrain from tightening monetary policy as much as they otherwise would have liked. In August, the FOMC said: "In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors." High energy prices have not been as transitory as some had hoped and may restrain theFed from hiking in December. Odds (75% chance) are for one more hike in November, before a pause. EUR/USD is trading around 1.2270, capped by Asian offers at 1.2280.
[16:54 EUR/JPY: Long Term Upward Trend Losing Momentum] San Francisco, September 21st: EUR/JPY has been on a long term upward trend since lows under 89.00 in September 2000. However, since highs above 140 in April 2003, the cross has been gradually losing momentum with monthly charts showing lower highs. In fact, from the peak in April 2003 until Sept. 2003, the fall in the EUR/JPY closely corresponds with the net securities outflow from the Eurozone. Though these investment outflows have continued, the EUR/JPY has managed to stall in a broad range, on the monthly charts, of 125-140. However, the charts show that the longer term upward trend is losing momentum and the investment data flows also confirm that the compulsion towards Eurozone investment is waning. Key support for this long term trend line now falls at 129.90/130.00. EUR/JPY trades at 134.92/96 currently, still stalling at 135.00.
[16:33 EUR/USD: Drifting Back Toward Range Top] Boston, September 21: EUR/USD is seeing some modest buying at midday in New York, taking EUR/USD back with striking distance of 1.2280, where Asian offers (along with European) offers were rumored earlier in the session. A few weak longs were flushed out on the late morning dip to 1.2245, but not enough to give the market fresh legs to the topside. Liquidity is thin ahead of the FOMC but dealers assume there is a pool of liquidity hanging over the market that they can tap if need be before 18:15 GMT.
I believe in stopping trading if you don't have good exit strategies when getting this close. We can see the spot dealers hitting stops right now, while the futures remains more calm - another good reason to use them and not spot.
Now it's time to let the scrutinizing of wordings pass it's time ...
The support at around 1.2259 on the december has been pretty strong, and we could see how they laid a strong bid and moderate asks at just this level. That made for several mini-trades for those on 1.2259/60. It seems to take forever for this bear-hug block to go away ...
End of RTH is also nearing, so one got to consider that in sizing too.
[17:04 EUR/USD: Oil Rally Muddies Fed Picture] Boston, September 21: The recent rebound in oil prices helps muddy the waters for the Fed, making a tough call even tougher. The Fed views high energy prices as a drain on the economy and could cause them to refrain from tightening monetary policy as much as they otherwise would have liked. In August, the FOMC said: "In recent months, output growth has moderated and the pace of improvement in labor market conditions has slowed. This softness likely owes importantly to the substantial rise in energy prices. The economy nevertheless appears poised to resume a stronger pace of expansion going forward. Inflation has been somewhat elevated this year, though a portion of the rise in prices seems to reflect transitory factors." High energy prices have not been as transitory as some had hoped and may restrain theFed from hiking in December. Odds (75% chance) are for one more hike in November, before a pause. EUR/USD is trading around 1.2270, capped by Asian offers at 1.2280.
[16:54 EUR/JPY: Long Term Upward Trend Losing Momentum] San Francisco, September 21st: EUR/JPY has been on a long term upward trend since lows under 89.00 in September 2000. However, since highs above 140 in April 2003, the cross has been gradually losing momentum with monthly charts showing lower highs. In fact, from the peak in April 2003 until Sept. 2003, the fall in the EUR/JPY closely corresponds with the net securities outflow from the Eurozone. Though these investment outflows have continued, the EUR/JPY has managed to stall in a broad range, on the monthly charts, of 125-140. However, the charts show that the longer term upward trend is losing momentum and the investment data flows also confirm that the compulsion towards Eurozone investment is waning. Key support for this long term trend line now falls at 129.90/130.00. EUR/JPY trades at 134.92/96 currently, still stalling at 135.00.
[16:33 EUR/USD: Drifting Back Toward Range Top] Boston, September 21: EUR/USD is seeing some modest buying at midday in New York, taking EUR/USD back with striking distance of 1.2280, where Asian offers (along with European) offers were rumored earlier in the session. A few weak longs were flushed out on the late morning dip to 1.2245, but not enough to give the market fresh legs to the topside. Liquidity is thin ahead of the FOMC but dealers assume there is a pool of liquidity hanging over the market that they can tap if need be before 18:15 GMT.
Seems like any stops are going in for a rough time ...
[18:04 EUR/USD: Knockouts All The Way Up If Fed Dovish] Boston, September 21: Should the Fed prove more dovish than the market expects, exotic barriers are seen starting from the 1.2300 level all the way up through 1.2500, every 50 pips. Downside exotics are not seen in force until the 1.2000 area on the downside. Markets are pricing in one more hike beyond today"s expected quarter point hike, but that could quickly be priced out after the FOMC. 1.2245 is very minor support on dips, followed by 1.2225 and 1.2180.
[17:44 EUR/JPY: Extending Highs To 135.05] San Francisco, September 21st: Positioning ahead of the FOMC meeting has seen a further squeeze higher in EUR/JPY with the cross rising to 135.05. The move tested the Ichimoku cloud at 135.04 but has not been able to sustain the gains. The prior triple highs of 135.07/09/11 from mid-September have been left untouched as has the upward trend line since April of 135.09. If these numerous resistance levels break, the next resistance is seen at 135.50.
[18:04 EUR/USD: Knockouts All The Way Up If Fed Dovish] Boston, September 21: Should the Fed prove more dovish than the market expects, exotic barriers are seen starting from the 1.2300 level all the way up through 1.2500, every 50 pips. Downside exotics are not seen in force until the 1.2000 area on the downside. Markets are pricing in one more hike beyond today"s expected quarter point hike, but that could quickly be priced out after the FOMC. 1.2245 is very minor support on dips, followed by 1.2225 and 1.2180.
[17:44 EUR/JPY: Extending Highs To 135.05] San Francisco, September 21st: Positioning ahead of the FOMC meeting has seen a further squeeze higher in EUR/JPY with the cross rising to 135.05. The move tested the Ichimoku cloud at 135.04 but has not been able to sustain the gains. The prior triple highs of 135.07/09/11 from mid-September have been left untouched as has the upward trend line since April of 135.09. If these numerous resistance levels break, the next resistance is seen at 135.50.
[18:16 US FED: Text of the FOMC Statement ]
Boston, September 21--
The following is the verbatim text of the statement the FOMC released following
the conclusion of the FOMC meeting. The text is also available on the Fed's
website at: http://www.federalreserve.gov
" For immediate release
The Federal Open Market Committee decided today to raise its target for the
federal funds rate by 25 basis points to 1-3/4 percent.
The Committee believes that, even after this action, the stance of monetary
policy remains accommodative and, coupled with robust underlying growth in
productivity, is providing ongoing support to economic activity. After
moderating earlier this year partly in response to the substantial rise in
energy prices, output growth appears to have regained some traction, and labor
market conditions have improved modestly. Despite the rise in energy prices,
inflation and inflation expectations have eased in recent months.
The Committee perceives the upside and downside risks to the attainment of
both sustainable growth and price stability for the next few quarters to be
roughly equal. With underlying inflation expected to be relatively low, the
Committee believes that policy accommodation can be removed at a pace that is
likely to be measured. Nonetheless, the Committee will respond to changes in
economic prospects as needed to fulfill its obligation to maintain price
stability.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman;
Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W.
Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E.
Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.
In a related action, the Board of Governors unanimously approved a 25 basis
point increase in the discount rate to 2-3/4 percent. In taking this action, the
Board approved the requests submitted by the Boards of Directors of the Federal
Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta,
Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco."
Boston, September 21--
The following is the verbatim text of the statement the FOMC released following
the conclusion of the FOMC meeting. The text is also available on the Fed's
website at: http://www.federalreserve.gov
" For immediate release
The Federal Open Market Committee decided today to raise its target for the
federal funds rate by 25 basis points to 1-3/4 percent.
The Committee believes that, even after this action, the stance of monetary
policy remains accommodative and, coupled with robust underlying growth in
productivity, is providing ongoing support to economic activity. After
moderating earlier this year partly in response to the substantial rise in
energy prices, output growth appears to have regained some traction, and labor
market conditions have improved modestly. Despite the rise in energy prices,
inflation and inflation expectations have eased in recent months.
The Committee perceives the upside and downside risks to the attainment of
both sustainable growth and price stability for the next few quarters to be
roughly equal. With underlying inflation expected to be relatively low, the
Committee believes that policy accommodation can be removed at a pace that is
likely to be measured. Nonetheless, the Committee will respond to changes in
economic prospects as needed to fulfill its obligation to maintain price
stability.
Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman;
Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W.
Ferguson, Jr.; Edward M. Gramlich; Thomas M. Hoenig; Donald L. Kohn; Cathy E.
Minehan; Mark W. Olson; Sandra Pianalto; and William Poole.
In a related action, the Board of Governors unanimously approved a 25 basis
point increase in the discount rate to 2-3/4 percent. In taking this action, the
Board approved the requests submitted by the Boards of Directors of the Federal
Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta,
Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco."