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

Yeah, how about that release, eh? Glad I went short at 1.2950 again!

I'm telling you, this is the exact opposite of when the Euro was rallying last year despite whatever news that came out. Back then, it would sell on good data, and then sell again on bad data. the market didn't care, all it could see was two words:

CURRENT ACCOUNT

Now, like then, it's doing the same thing except it's buying USD on good, and buying again on bad. Because once again, the market sees only two words:

RISING RATES

We can argue and hypothesize and reason until the cows come home. But at the end of the day, we all know - deep down - the market will continue to follow it's one minded direction no matter what the hell the news throws at us (barring, of course, a cataclysm).

-Ivan
 
Yeah - I'm actually hoping for a negative TICs number - will give me another opportunity to short the EUR ;)

This afternoon should be interesting... Good luck.
 
This EUR is damn hard to trade. No real bid all night and bam out of the blue all bids. I bought 1.2910-11 in futures and was just about to give up. In fact, got chopped a few times before catching an edge. Looks like EUR turned the corner to me.
 
From a technical perspective, I think the EUR turned the corner. From a fundy perspective, I cannot see this lasting. Rates will continue to rise in the US, and they'll continue to sit still in the EU, well into the end of the summer. This, of course, is just my take.

Tomorrow's price data is likely to show a modest rise in the US, stirring more belief that "faster than normal"rate hikes are coming, though I believe the possibility of that happening are extremely low.

The often heralded "trade deficit" shows a possible trend in funding, and there's certainly no problem last month or this one. Overall economic data in the US seems rosey, which is more than I can say for the EU at the moment. In fact, the news on the wires was The EU's Monetary Affairs Commissioner Almunia saying that he sees EU growth at least 2%. Am I supposed to do cartwheels over this?

Nah, I just shorted 1,2975 with a generous stop to allow for all the stupid price action going on right now. I know, I know. The market can remain irrational far longer than I can stay solvent. But that's what all this is, right? An educated guess?

My educated guess is that medium term will see a rise in the dollar. Right now, price action is relative to 4cast's comment of the month: "Silly" seems to be in season.

Cheers.

-Ivan
 
Thank you for your well reasoned opinion. I suppose I differ strongly with respect to the upcoming perception and reality of rate increases. I think that we are seeing the beginnings of an unravelling of the rate story. The big bond rally coupled with the massive sell-off in equities and the very poor price action in the metals leads me to believe that the China story which has been the top story of the last year is changing. Rising tensions with Japan as well as threatened sanctions (although only a fool believes there will actually be sanctions) do to the lack of action on the Yuan is the story of the day. Soon the market will be talking rate cuts as the next Fed move. Bottom line, fundamentals of the dollar are too difficult for me to understand. Far too many cross-currents. For me, it is undeniable that the longer-term trend toward a weaker dollar remains intact with the current levels the 'strike-zone' for selling dollars.
 
First, let me say that in regards to experience in forex, I humbly yield to you, sir. That being said, however, I gotta go with my gut on this. I do agree - long term, nothing but dollar weakness on the schedule.

But mid term, ie by June ish, dollar will be the key.

Cheers.
 
No need to yield. The market keeps us all humble and when one can't appreciate and consider other's opinions, that individual is destined for a big tumble.
 
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