Chinook's EUR/USD (E/$)Mumblings
- Thread starter chinook
- Start date
Have any of you a index futures, or mainly equities background ? How do you compare the anemic equities to the FX world ?
edit: with some positions on the defensive - the market will continue trying to put in some better hurt ..
Today's asian markets open will be very, very interesting. Yummy.
edit2:
[19:53 GMT Sep 21] USD/CHF moved lower throughout the session today. The slide below 1.2620 hinted at a broader decline was brewing. The bulk of the selling from CTAs and model accounts took place between 1.2580/1.2600, and prices bounced numerous times off the 5-week trendline support at 1.2575. Following the FOMC decision to raise rates by 25 bps, USD/CHF got hit again and slid to a fresh session low at 1.2525. That breaks a 2-1/2 month trendline on the daily charts at 1.2550 and warns of a downside breakout. Large stops are below 1.2500 and could trigger a sharp selloff in the days ahead. Traders are still cautious after suffering many failed breakouts in the last 5 months of range trading. We favor buying a dip toward 1.2500, with a stop/reverse below 1.2450. EUR/CHF shot above 1.5500, but moved lower after a Swiss name unloaded about a yard of the cross on the markets. It fell back to probe Fibo support near 1.5435, setting a session low at 1.5432. Traders are suggesting a close below 1.5480 will signify a reversal is in progress. CHF/JPY is heading for a test of the channel top on the short-term charts at 88.00.
[19:41 GMT Sept. 21st] [EUR/USD] Stops above 1.2350 with option protection ahead of 1.2400; more stops above 1.2400.
[19:29 GMT September 21] A stunningly strong day for EUR/USD given the relative lack of bad news for the dollar today. Sure there are the usual terror threats, and another beheading in Iraq, but the rally was particularly surprising given that the Fed basically telegraphed a continuation in its series of rate hikes than a pause. EUR/USD dipped to NY session lows of 1.2245 immediately after the announcement (from highs of 1.2082) before rocketing higher on what looked like a macro trade into the long-end of US Treasuries and out of the USD. A high of 1.2345 was reached in a matter of seconds. Heavy stop-loss buying was seen on the break of daily downtrend resistance at 1.2315. Exotics were triggered at 1.2300 and just missed being tripped at 1.2350. EUR/USD looks set to close above its trendline (drawn from the July highs at 1.2465. The market is clearly less sanguine about the state of the US economy than the Fed. Exotic barriers lie all the way up, every 50 pips starting at 1.2350. A breakout has been long anticipated, and looks like it may finally be here.
<pre>| [ EUR/USD TRADING PAGE ]
| [SPOT] |[TECHNICAL SIGNIFICANCE] |[RECOMMENDATION] | [POSITION]
: 1.2540(S) |daily high Mar 1 |flat on a failure | [FLAT at]
: 1.2485(S) |61.8% of 1.2930 - 1.1760 |flat on a failure | [1.2270]
: 1.2465(M) |daily high Jul 19 |flat on a failure |
: 1.2385(M) |hourly highs Aug 16, 17 |sell failure, buy break |Open|21/09/04
[1.2336] 20:10 GMT TUE 21 SEP : | TIME 14 38|
: 1.2280(M) |hrly highs Sep 21 |buy a bounce | |
: 1.2250(M) |38.2% of 1.2125-1.2330 |buy a bounce |TGT |
: 1.2220(M) |hourly support Sept 21 |buy a bounce |Stop|
: 1.2180(M) |previous range top Sept 21|buy a bounce |
============|==========================|=========================|============= </pre>
The 1.2310 high from Sep 10 has been removed. Overbought intraday studies haveyet to curtail the advance. Downtrend line resistance at 1.2325 has also been eclipsed. Overbought or not, we would have to consider longs on a sustained move above there, but we will wait for a retest of the Aug 16 and 17 highs at 1.2385. Prefer buying dips to the 1.2280 or 1.2250 areas.
[19:15 USD: Grasping Onto The Fed Inflation Outlook] San Francisco, September 21st: Traders are still trying to find a justification for the US bond rally and resultant fall in yields in the face of an upbeat Fed looking for measured rate hikes. The focus is turning to the Fed comments that inflation has eased. Analysts note that this is much more moderated view on inflation than either of the prior two Fed statements and seems to be the justification for the bond rally. Ten year yields are at 4.033% currently. However, note that this would usually benefit the high yield currencies on this inflation view with dollar bloc currencies usually bought on soft CPI or PPI data. Instead, AUD has stalled ahead of 0.7050, NZD/USD has stalled ahead of 0.6638 and USD/CAD continues to find support ahead of 1.2850. These will need to give way to trigger a broader-based USD sell-off.
edit: with some positions on the defensive - the market will continue trying to put in some better hurt ..
Today's asian markets open will be very, very interesting. Yummy.
edit2:
All the spot brokers I saw had this whip-move. I think the whole market (incl. InterBank) had it, but when looking at the small spikes in the hour before the FOMC with the spots I think they were quite suspect - also there were several medium divergences between spot dealers.
[19:53 GMT Sep 21] USD/CHF moved lower throughout the session today. The slide below 1.2620 hinted at a broader decline was brewing. The bulk of the selling from CTAs and model accounts took place between 1.2580/1.2600, and prices bounced numerous times off the 5-week trendline support at 1.2575. Following the FOMC decision to raise rates by 25 bps, USD/CHF got hit again and slid to a fresh session low at 1.2525. That breaks a 2-1/2 month trendline on the daily charts at 1.2550 and warns of a downside breakout. Large stops are below 1.2500 and could trigger a sharp selloff in the days ahead. Traders are still cautious after suffering many failed breakouts in the last 5 months of range trading. We favor buying a dip toward 1.2500, with a stop/reverse below 1.2450. EUR/CHF shot above 1.5500, but moved lower after a Swiss name unloaded about a yard of the cross on the markets. It fell back to probe Fibo support near 1.5435, setting a session low at 1.5432. Traders are suggesting a close below 1.5480 will signify a reversal is in progress. CHF/JPY is heading for a test of the channel top on the short-term charts at 88.00.
[19:41 GMT Sept. 21st] [EUR/USD] Stops above 1.2350 with option protection ahead of 1.2400; more stops above 1.2400.
[19:29 GMT September 21] A stunningly strong day for EUR/USD given the relative lack of bad news for the dollar today. Sure there are the usual terror threats, and another beheading in Iraq, but the rally was particularly surprising given that the Fed basically telegraphed a continuation in its series of rate hikes than a pause. EUR/USD dipped to NY session lows of 1.2245 immediately after the announcement (from highs of 1.2082) before rocketing higher on what looked like a macro trade into the long-end of US Treasuries and out of the USD. A high of 1.2345 was reached in a matter of seconds. Heavy stop-loss buying was seen on the break of daily downtrend resistance at 1.2315. Exotics were triggered at 1.2300 and just missed being tripped at 1.2350. EUR/USD looks set to close above its trendline (drawn from the July highs at 1.2465. The market is clearly less sanguine about the state of the US economy than the Fed. Exotic barriers lie all the way up, every 50 pips starting at 1.2350. A breakout has been long anticipated, and looks like it may finally be here.
<pre>| [ EUR/USD TRADING PAGE ]
| [SPOT] |[TECHNICAL SIGNIFICANCE] |[RECOMMENDATION] | [POSITION]
: 1.2540(S) |daily high Mar 1 |flat on a failure | [FLAT at]
: 1.2485(S) |61.8% of 1.2930 - 1.1760 |flat on a failure | [1.2270]
: 1.2465(M) |daily high Jul 19 |flat on a failure |
: 1.2385(M) |hourly highs Aug 16, 17 |sell failure, buy break |Open|21/09/04
[1.2336] 20:10 GMT TUE 21 SEP : | TIME 14 38|
: 1.2280(M) |hrly highs Sep 21 |buy a bounce | |
: 1.2250(M) |38.2% of 1.2125-1.2330 |buy a bounce |TGT |
: 1.2220(M) |hourly support Sept 21 |buy a bounce |Stop|
: 1.2180(M) |previous range top Sept 21|buy a bounce |
============|==========================|=========================|============= </pre>
The 1.2310 high from Sep 10 has been removed. Overbought intraday studies haveyet to curtail the advance. Downtrend line resistance at 1.2325 has also been eclipsed. Overbought or not, we would have to consider longs on a sustained move above there, but we will wait for a retest of the Aug 16 and 17 highs at 1.2385. Prefer buying dips to the 1.2280 or 1.2250 areas.
[19:15 USD: Grasping Onto The Fed Inflation Outlook] San Francisco, September 21st: Traders are still trying to find a justification for the US bond rally and resultant fall in yields in the face of an upbeat Fed looking for measured rate hikes. The focus is turning to the Fed comments that inflation has eased. Analysts note that this is much more moderated view on inflation than either of the prior two Fed statements and seems to be the justification for the bond rally. Ten year yields are at 4.033% currently. However, note that this would usually benefit the high yield currencies on this inflation view with dollar bloc currencies usually bought on soft CPI or PPI data. Instead, AUD has stalled ahead of 0.7050, NZD/USD has stalled ahead of 0.6638 and USD/CAD continues to find support ahead of 1.2850. These will need to give way to trigger a broader-based USD sell-off.
Quote from csaunders:
All Aboard for the ride down to test 1950 - next stop 1.2120 for a quick pause to get some buyers on board only to leave us when 21 is broken - All Aboard, All Aboard!!!!
My prediction... although I have been known to be wrong
Did you hold on to your shorts from late yesterday? I was shaken out before the session end and stayed flat during US overnight.
It's though to predict what EurUsd will be doing next--It's like a psycho girlfriend
Chinook
Surprise when I woke up, but I was watching the action just before the european open 6h ago and was frustrated with the 1.2315 break down ... A long trade got stopped out at -6 pips before I went to bed. I was anticipating some 1.2280-levels this morning before another test upwards -- but just like you say; longer term predictions are very hard to make.
I guess I will have to play along with no special bias for the moment then.
Deutsche Bank says:
EUR USD (1.2320) Market commentators scratched their heads as
they contemplated the roaring bond markets yesterday (interestingly, the Fedâs desire for more transparency has allowed a 100 percent âhitâ rate for Fed Funds forecasters, but long-bond traders were still wrong-footed). âWhy are yields so low?â asked one TV interviewer. âBecause the market sees a low risk of inflationâ, came the answer. âSo, why is gold so strong if there is
no inflation?â âBecause the dollar is weak.â âAnd why is the dollar weakâ¦?â The stuttering that followed gave the impression that the interviewee wanted to say âbecause yields are lowâ, but changed his mind. The truth was that nobody was able to explain the euroâs latest one-day explosion. The sudden climb probably took day-t raders, who were comfortably settled for a quiet pre-Fed session, by surprise. What was probably no more than a one-off order, left them scrambling to buy later in the day. But, as the singlecurrency nears the upper end of the perceived range, bears will be increasingly reluctant to buy back short positions. However, the argument we presented for the lower border at the start of the week is also valid for the upper: if all traders sell in advance of the upper threshold in the expectation that offers from âothersâ will cap the rally, will there be any âothersâ left to sell when it gets there? A break of 1.2410/15 would therefore be bullish for the euro and one should not expect any significant offers at 1.2460, the July peak. To the downside, 1.2165 has now become the pivotal support. An intermediate demand point is seen at 1.2225.
Thomson IFRMarkets.com says:
[12:59 EUR/USD: 1.2220 Stops Eyed, Flush Out Seen Before Bounce] Boston, September 22: EUR/USD remains pinned to session lows with dealers grappling with stale longs taken after the surprising price action following yesterday"s FOMC meeting. Stops are eyed starting at 1.2220 and a move to the downside to trigger them may be needed before the EUR can regain its footing. Whispers of Asian bids are heard on dips this morning, buying back option protection ahead of the plethora of barriers starting at 1.2350.
[12:12 EUR/USD: Frustration Mounts After False Breakout] Boston, September 22: Dealers didn't know what to make of the move higher in EUR/USD after the FOMC yesterday, but were forced to jump on board as trendline resistance at 1.2315 was removed. US investment bank selling throughout the London morning has pushed the pair lower and ruined yesterday"s technical set up, plunging the market back into uncertainty once again. Keep an eye on US interest rates this morning, especially at the long end of the curve. A break back below 4.0% should limit USD strength. US 10s yield only 8 bp more than German bunds at present, not much of an inducement for European hot money. Stops are seen under 1.2230 while support comes in at 1.2180. Don"t be surprised to hear reports of Asian central bank buying on the dips, however, as those names were sellers ahead of 1.2350 yesterday.
I guess I will have to play along with no special bias for the moment then.
Deutsche Bank says:
EUR USD (1.2320) Market commentators scratched their heads as
they contemplated the roaring bond markets yesterday (interestingly, the Fedâs desire for more transparency has allowed a 100 percent âhitâ rate for Fed Funds forecasters, but long-bond traders were still wrong-footed). âWhy are yields so low?â asked one TV interviewer. âBecause the market sees a low risk of inflationâ, came the answer. âSo, why is gold so strong if there is
no inflation?â âBecause the dollar is weak.â âAnd why is the dollar weakâ¦?â The stuttering that followed gave the impression that the interviewee wanted to say âbecause yields are lowâ, but changed his mind. The truth was that nobody was able to explain the euroâs latest one-day explosion. The sudden climb probably took day-t raders, who were comfortably settled for a quiet pre-Fed session, by surprise. What was probably no more than a one-off order, left them scrambling to buy later in the day. But, as the singlecurrency nears the upper end of the perceived range, bears will be increasingly reluctant to buy back short positions. However, the argument we presented for the lower border at the start of the week is also valid for the upper: if all traders sell in advance of the upper threshold in the expectation that offers from âothersâ will cap the rally, will there be any âothersâ left to sell when it gets there? A break of 1.2410/15 would therefore be bullish for the euro and one should not expect any significant offers at 1.2460, the July peak. To the downside, 1.2165 has now become the pivotal support. An intermediate demand point is seen at 1.2225.
Thomson IFRMarkets.com says:
[12:59 EUR/USD: 1.2220 Stops Eyed, Flush Out Seen Before Bounce] Boston, September 22: EUR/USD remains pinned to session lows with dealers grappling with stale longs taken after the surprising price action following yesterday"s FOMC meeting. Stops are eyed starting at 1.2220 and a move to the downside to trigger them may be needed before the EUR can regain its footing. Whispers of Asian bids are heard on dips this morning, buying back option protection ahead of the plethora of barriers starting at 1.2350.
[12:12 EUR/USD: Frustration Mounts After False Breakout] Boston, September 22: Dealers didn't know what to make of the move higher in EUR/USD after the FOMC yesterday, but were forced to jump on board as trendline resistance at 1.2315 was removed. US investment bank selling throughout the London morning has pushed the pair lower and ruined yesterday"s technical set up, plunging the market back into uncertainty once again. Keep an eye on US interest rates this morning, especially at the long end of the curve. A break back below 4.0% should limit USD strength. US 10s yield only 8 bp more than German bunds at present, not much of an inducement for European hot money. Stops are seen under 1.2230 while support comes in at 1.2180. Don"t be surprised to hear reports of Asian central bank buying on the dips, however, as those names were sellers ahead of 1.2350 yesterday.
Getting in a little early in my scalps now, so profits are very small .. 1-3 pips. Perhaps take it a little slow, and not try and enter on so many opportunities because there will probably be some erratic behaviour after yesterday's and today's frustrating moves.
Yesterday was good with a total of 48 pips, but I got lucky with that long entry when it jumped from the downspike.
No lack of rumours, though.
[13:42 EUR/USD: Holding Lows Ahead of Expiry] EUR/USD continues to tread water around 1.2230/35 ahead of what are rumored to be sizeable expiries in the 1.2250/60 region at 14:00 GMT. European flow data is being scrutinized today as another month of outflows was recorded, especially from European fixed income markets. Foreigners sold EUR 6.6 bln in Eurozone bonds while Europeans bought over EUR 30 bln of foreign bonds, a drag on the EUR. With Asian bids rumored on dips, another range-bound session looks likely. Stops remain below 1.2220.
Yesterday was good with a total of 48 pips, but I got lucky with that long entry when it jumped from the downspike.
No lack of rumours, though.
[13:42 EUR/USD: Holding Lows Ahead of Expiry] EUR/USD continues to tread water around 1.2230/35 ahead of what are rumored to be sizeable expiries in the 1.2250/60 region at 14:00 GMT. European flow data is being scrutinized today as another month of outflows was recorded, especially from European fixed income markets. Foreigners sold EUR 6.6 bln in Eurozone bonds while Europeans bought over EUR 30 bln of foreign bonds, a drag on the EUR. With Asian bids rumored on dips, another range-bound session looks likely. Stops remain below 1.2220.