EUR and GBP on their way up?

S

supplyside

hi everyone,

I mostly have been trading the EUR and GBP and try to make 10-20 pips a day.

Have been relying on fundamental analysis more than anything else so far in my few months of trading and its going alright so far: around 350 pips per month.

Now I need someone to tell me how the heck can the USD rally on a pathetic GDP release (1.1% I think) recently and then the trade deficit number is bad but still the greenback manages to rally?

Is this just a slight hiccup and in fact in the bigger picture view, the EUR and GBP are poised to appreciate? Or am I missing something here (fundamental or technical side)?

I personally finding it very appealing indeed to go long in the EUR-USD in the 1.1890 region.............. any thoughts?
 
Quote from supplyside:

Now I need someone to tell me how the heck can the USD rally on a pathetic GDP release (1.1% I think) recently and then the trade deficit number is bad but still the greenback manages to rally?
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Take a look at the USDJPY chart. You see the fall from 118.94, right? Rumor has it that those who were selling on the way down decided to take profit since they met stiff support at 116.87. So what you have here is a classic case of a short squeeze. This U.S. dollar buying spread to other pairs as well. I hope this helps you out, my brother.
 
Well, how do you explain the nice summer rally last year starting the day after the London bombing? I really don't and one thing I know now is that it does not matter why things happen. It is just important to see how the market reacts to events and go with the flow. The why is irrelevant at this point. Trading, I found out, defies logic. Or maybe just follows its own logic. In any case, I just leave the why out of my trading, just trade what happens, or try to.
 
Quote from Deptrai:

Take a look at the USDJPY chart. You see the fall from 118.94, right? Rumor has it that those who were selling on the way down decided to take profit since they met stiff support at 116.87. So what you have here is a classic case of a short squeeze. This U.S. dollar buying spread to other pairs as well. I hope this helps you out, my brother.
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yeah thanks, that does help understand what happened..... I also saw someone else posting here that some Japanese Life Insurer started buying the USD-JPY in the NY session on Friday that has triggered all this volatility.

I guess I will have to be patient for the time being before going long in the EUR-USD as some say that the techncial damage for the EUR bulls was "too much" on Friday.

Still have a very elementary understanding of technicals and so don't feel too confident shorting the EUR-USD; the fundamentals just don't justify it..........short at 1.18.ish with the record high twin deficits in the US ......come on!! :)
 
Dont try to figure it out. You cannot. I expected with every one else that the YEN would rally in the face of Friday's news. It rallied a short time while the shorts got squeezed. I was feeling the pain too, but to my surprise I ended that day with a profit. Fundamentaly, that means the Yen could not support its gains. Technically, my signal has been to sell for the last few days. I stayed short, and I re-entered short tonight. I find that if you trade on fundamentals you get burned.

Good Luck
Steve
 
thanks guys, your suggestions make sense that while trading we need not worry about the "why's" and just trade with the market flows to make our buck for the day.

Steve, you said you went short tonight in the USD-JPY? May I ask at what level. I myself am thinking of going short at 117.90 hoping to make at least 30 or so pips.

thanks again
 
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