Chinook's EUR/USD (E/$)Mumblings

Quote from Gringinho:

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I think we'll see some range-based trading for now. The excitement was all about the new record ground for the EURUSD and all the wailing along with the record oil prices. Now that's familiar ground, and I see no reason for pushing it higher yet.

Some nice chopping is what will upset the markets for a while; making it look like it will break down, then up again - ad nauseum. The underlying trend and fact is still here - we will be getting used to levels over 1.30 - but with the temptation of letting it go lower - chopping markets good. There should be no surprise if we see new highs later on - probably on the back of some big moves rather than a slow steady grind like last fall and winter.
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Quote from Gringinho:

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I still belive we will see 1.30 again for setting the range ahead. I have no long positions, just a balanced EUR and USD funding. After striking lucky on the initial whipsaw I just decided to call it a week.
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Nice action today getting below 1.30 .
Inflation woes and rate hike scares in the equity markets is just the right blend now to do some heavy chopping.
 
Quote from trade-ya1:

I'm not smart enough to understand the fundamental drivers of the currencies, they always seem to be changing. Maybe the direction of the trend influences the perception of the fundamentals or even influences the actual fundamentals themselves- reminds me of reflexivity. In my opinion, the long-term trend is the most powerful force in the universe of trading. It won't break easy. When it does, I'll happily go the other way. Wish you good trading as well. I enjoy a healthy, respectful exchange (rate). :)
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When the fundamentals change, the trend change. Also the long-term trend. Nothing last forever.
 
Quote from Baruch:

When the fundamentals change, the trend change. Also the long-term trend. Nothing last forever.
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Baruch, I read these comments about "fundamentals" from you and other posters here, and I have to wonder.

By fundamentals do you mean the INTEREST RATE DIFFERENTIAL that exists now between USD and Euro?

If so, how would you explain the behaviour of Yen (which has the lowest nominal interest rates) during the past couple of years. Had there not been the massive interventions by BoJ, Yen would have appreciated much more than 25% vs the USD.

If you don't consider IRD but something else as "fundamentals", please specify which ones that would be.

Personally, I don't think that Euro is "undervalued" vs USD (especially if EuroZone loosens the Stability Pact), but the true USD funnymentals are so alarming and deeply rooted, that I can't see how USD will escape from losing 30% to 50% of its purchasing power in the not so distant future.

Note I said "purchasing power", perhaps the exchange rate of USD vs Yen or Euro will stay at these levels (1.25 - 1.40)
 
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