Eur/USD

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Fellow Traders - This may be historical. Have you considered this view. Are your blinders on or are you "listening" to the market. Bloomberg is talking current account this morning.

I figure this one will get you guys going.

DRT:p
 

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I think your view on the rates are incorrect, DRT. Fed might hike this month, in fact I'm giving a slightly better than average chance that they do. ECB definitely will, but only .25 instead of the half point EUR bulls are insanely thinking.

Then the Fed will pause. The ECB may go another .25, but they will see a slowdown in the US as relief on hiking, as this slowdown will invariably affect them as well.
 
Ivan,

You are good with fundamentals. Obviously the USD has a lot of issues that need correcting. What in your opionion is the key fundamental that would cause a shift in emotion in the market?

What will be the next big focus?

DRT
 
[13:06 EUR/USD: Talk of Only 25 bp Hike Thursday Weighs] Boston, June 5. After
getting revved up this morning over weekend reports that the ECB may hike 50 bp
on Thursday a report from a New York consulting shop suggesting only a 25 bp
hike is helping knock EUR/USD lower. Dealers see heavy selling from a German
name amid the slide into the 1.2920s. Bids are eyed near 1.2915 and again toward
1.2880/90.
 
I think the market is looking for direction, and so am I, to be honest.

Rates are played out. Yes, they have some actual financial backing (ie, better returns) and so they're never truly "played out". But the story about them is. The story about the ECB isn't, and hence it's receiving more attention. We all know the US is close to pausing - it's just a question of whether it is here or at the next meeting. The ECB has no indication of pausing ahead of them (even though Trichet himself has said to "not expect a series of hikes" - something the market conveniently continues to ignore).

In the lack of clear direction, dealers will follow the old stuff - the deficits, Iran, oil, a slowdown in the US economy....blah blah...

What I find amusing is the slowdown in the US economy. So the US slows to 3%. What's the EU's forecast for growth? 2%? 1.9? and that's a good year for them.

Look at the chart I've attached (that I got from Jack Crooks). That is the biggest sign I've seen this last month of a potential reversal.

The market just has to find a "why". The ECB hiking a measly .25% and a neutral or dovish statement about future hikes could do it.
 

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When I try to clear my head, this stands out. Like today, the ISM was ONLY 60. Has everyone forgotten that this is a good level?

Europe has to perform. I am not convinced.



Quote from Ivanovich:



What I find amusing is the slowdown in the US economy. So the US slows to 3%. What's the EU's forecast for growth? 2%? 1.9? and that's a good year for them.
More...
 
LOL! :

"EUR/USD is edging higher in very quiet trade ahead of what is expected to be a race among three of the world"s most important central bankers to say the word "vigilant" the most. The odds-makers have Trichet as the early favorite expecting him to be particularly vigilant, while Bernanke and Muto follow at strongly vigilant and just plain vigilant, respectively. The fun kicks off at 18:15 GMT, a bit over two hours from now. "
 
Well now this is different, the EZ is approaching potential growth. What the hell is that?



Trichet is in a self-imposed "quiet time" ahead of the monthly policy meeting on
Thursday and says he will give no hints on policy at today"s event. He does say
that Eurozone productivity is badly hampered by weak productivity, but that
recent employment data has been "flattering" and the Euro Zone is approaching
potential growth.
EUR/USD has steadied after dipping as low as 1.2935 on rebounding odds of a June
rate hike. It trades now at 1.2940.
 
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