us $ bottom

Free Thinker · Dec 20, 2003

the us$ looks bottomed to me. dx04h gapped down to a new low friday and closed higher. looks like possible reversal day to me. xau has also been getting weaker possibly signaling a shift in dollar sentiment.
looking for ideas on the best way to play a dollar reversal here?

m22au · Dec 20, 2003

Vhehn,

What's your timeframe? target gain? stop loss?

Free Thinker · Dec 21, 2003

Quote from m22au:

Vhehn,

What's your timeframe? target gain? stop loss?

im not doing anything yet. still thinking about it.

Hello_Dollars · Dec 21, 2003

Quote from vhehn:

the us$ looks bottomed to me. dx04h gapped down to a new low friday and closed higher. looks like possible reversal day to me. xau has also been getting weaker possibly signaling a shift in dollar sentiment.
looking for ideas on the best way to play a dollar reversal here?

Buy NEM puts.

m22au · Dec 21, 2003

What my questions were leading to ... was that you could be correct in spotting a short-term bottom for the US Dollar.

However, the currency is in a long-term downtrend, and you will be able to make much more money shorting the US Dollar (and buying gold, silver, Australian Dollars, NZ Dollars, Canadian Dollars, South African Rand) over a considerable period, rather than a small gain over a handful of months by buying the US Dollar.

Quote from vhehn:

im not doing anything yet. still thinking about it.

Free Thinker · Dec 21, 2003

Quote from m22au:

What my questions were leading to ... was that you could be correct in spotting a short-term bottom for the US Dollar.

However, the currency is in a long-term downtrend, and you will be able to make much more money shorting the US Dollar (and buying gold, silver, Australian Dollars, NZ Dollars, Canadian Dollars, South African Rand) over a considerable period, rather than a small gain over a handful of months by buying the US Dollar.

currencies are more like bonds than stocks. they don't go to zero. there is a practical limit to how far they can fall against other currencies. i think both fundamentally and technically we are there. time will tell.

range · Dec 21, 2003

I am certainly not an expert in currencies, but judging by the Commitments of Traders reports (from www.cftc.gov), sentiment seems extended. But, extended sentiment is common in a trending market, if that is what this continues to be. Seems like there could be a sharp pull-back at any time, however.

Below are the recent week's statistics, edited for the way I like to look at them:

NON-COMMERCIAL
LONG | SHORT |SPREADING|
COMMITMENTS

CANADIAN DOLLAR
17,627 1,029 45

SWISS FRANC
17,217 3,963 10

POUND STERLING
24,923 2,368 10

JAPANESE YEN
62,421 4,185 2

EURO FX
39,854 5,071 613

howard24 · Dec 21, 2003

Wait for something tangible and the form of a key-day or key week reversal [bar chart] signal then build incrementally a Long-US$ position. Until then, the trend is your friend -even if it is looking a bit jaded.

m22au · Dec 21, 2003

Point taken, however we disagree on how much further downside there is for the US Dollar. I'd say that the losses seen since 2001 are less than half of the final damage, especially against gold and silver.

Quote from vhehn:

currencies are more like bonds than stocks. they don't go to zero. there is a practical limit to how far they can fall against other currencies. i think both fundamentally and technically we are there. time will tell.

SethArb · Dec 21, 2003

expert FX trader claims we are not there yet in Euro

he does say we are close to getting there in the Pound

http://www.fxstreet.com/chat/chatsession.asp