USD - Up or Down?

O

overload

If you trade the EUR/USD either for scalping or longer term, or if you trade any of the USD pairs, you're probably thinking... "USD - up or down?"

If you aren't many others probably are.

So, the EUR/USD - are we in the beginning of a massive correction/reversal where USD hit the bottom at 1.2930 last week against the Euro and will rally from here out ( of course, this means the Euro is now in a FREEFALL against the USD - is it? No. ) or did today's low of 1.2372 represent the hysteria misjudgements of the masses based on rumors, fears and overpressure of living in a world now haunted and plagued by terrorism and out of control soaring deficits?

Here's my take on it ( and I'd like to read yours ). Today's move and this week's move is NOT a new established trading range on the USD's way to higher ground long term or otherwise. Neither was it the sign of a change of trend direction for the USD.

It was simply a bump in the road ( you can actually see the bump/spike on the USD/JPY chart - 3 hour ) on the way to 1.30 EUR/USD. Massive structural trend changes are not started or created with a spike in the other direction. Spikes and run ups are fool's gold that kill those who bite into them.

If the USD turns back it will be a gradual turning almost imperceivable with little on the surface that would explain why.

After months of slow but solid reversal the market may then see why. This weeks mighty Tonka Toy spike up of the USD happened because of the perfect storm of media headlines that got beat like a dead horse causing hysteria of the masses and jumpy indecision of professional fund managers/heads of fx bank trading desks, as well as top executives of the central banks and analysts.

Once the ECB meets next week and laughs off the concept of a rate hike the USD will continue drifting down on its way to where it belongs and needs to go.

Then, as USD longs begin seeing deep red in their P/L indicators, cutting their losses, the EUR/USD will continue on firm ground to and through 1.30 that we will see by March 15th.

Two things about the ECB decision not to cut their rate and it should be clear to you... it is in the best interest for the EURO economy to assist with keeping the USD on a recovery by its further weakening.

For this cause alone they will not cut their rate that is already cut to the bone.

The second half of that is: the (losing) masses only presume (automatically with zero thought taken) that the USD will rise all these countless points (again, automatically) should the ECB cut their interest rate.

But, in reality, the ECB slashing its rate doesn't mean that.

Everyone gets slaughtered in the market NOT by what they see and consider but by what they DON'T see and never think about. So is this seemingly taken for granted principle of the USD's price automatically flying up to the sky upon a ECB rate cut... c'mon, guys, the world doesn't spin on a ECB rate cut, alright?

Furthermore, yes it's been two years since the USD started falling but, we are only about 1/2 way there, traders. It will take at least another 2 years ( and that is if the US begins then continues to address, correct AND maintain the structural flaws in its country that is the cause of the USD's downward trend.

Before it is over we will see EUR/USD go to 1.300 - 1.500 on its way to a top of 2.000+.

If you are holding a long EUR/USD position thinking that you are getting in on the bottom of a 2000 point reversal, my advice is to dump the USD and cut your losses before you lose 10 times more.

This is a false alarm, guys, that only the saps got sucked into.

Don't do likewise.

You'll thank me for this later.

What we got here is like the concept of a nice looking nice tasting topical frosting ... smeared all over a huge horse dropping, ok? It makes it LOOK like something that it is not.

I'm not writing all this because I have some great asperation for the USD to fall. I trade both long and short positions so it makes no difference at all to me which way the USD goes.

Let me leave you with a couple thoughts that hopefully will sober up the longs...

Headline: "Alan Greenspan drops dead of a heart attack on his way to his next testimony before congress."

Question: How far would the USD suddenly drop on that headline?

500 points?

800 points?

1500 points?

2500 points?

You're not really sure are you? This should make you realize how fragile, no, brittle, the USD is. A single individual dying would send the EUR/USD spiking up so hard it would make September G-7 Dubai look like a walk in the park.

By the way, here's a link for your consideration... http://www.toptips.com/debtclock.html there's only one item like that on the planet among all other nations.

That is NOT going to reverse... neither is the price of the USD.

Good trade,

Sam
 
Quote from overload:


Once the ECB meets next week and laughs off the concept of a rate hike the USD will continue drifting down on its way to where it belongs and needs to go.

Then, as USD longs begin seeing deep red in their P/L indicators, cutting their losses, the EUR/USD will continue on firm ground to and through 1.30 that we will see by March 15th.

Two things about the ECB decision not to cut their rate and it should be clear to you... it is in the best interest for the EURO economy to assist with keeping the USD on a recovery by its further weakening.
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The EU does not care about the USD, they care about the Euro, if the Euro heads past 1.30 the EU will be hurting badly and we will have bank interventions, whether this is just fighting the tide hoplessley remains to be seen. EU business is hurting as it is by the low USD, they would LOVE for the USD to head back down to 1.10 or lower.


For this cause alone they will not cut their rate that is already cut to the bone.

The second half of that is: the (losing) masses only presume (automatically with zero thought taken) that the USD will rise all these countless points (again, automatically) should the ECB cut their interest rate.
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How many points does "countless" equal, if you mean retracing 20 whole cents then I agree, but, the USD can easily gain strength of a several hundred pips lasting a couple of months (Just look to what happend at the start of last June-August, 1000 pips the USD strengthend by) unless you were/are a long term investor such retracements will hurt badly if you keep going long into them.



Furthermore, yes it's been two years since the USD started falling but, we are only about 1/2 way there, traders. It will take at least another 2 years ( and that is if the US begins then continues to address, correct AND maintain the structural flaws in its country that is the cause of the USD's downward trend.

Before it is over we will see EUR/USD go to 1.300 - 1.500 on its way to a top of 2.000+.
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After 1.30 the ECB will be intervening like hell, business in the EU will be crippled badly if its exports become so expensive to the US. Also IF it ever got to 2.0 there would be many many huge retracements of 1000s of pips along the way, simply saying buy lots of euros now is silly unless your so certain 2.0 is achievable and willing to hold on for at least couple of years.


Headline: "Alan Greenspan drops dead of a heart attack on his way to his next testimony before congress."

Question: How far would the USD suddenly drop on that headline?

500 points?

800 points?

1500 points?

2500 points?

You're not really sure are you? This should make you realize how fragile, no, brittle, the USD is. A single individual dying would send the EUR/USD spiking down so hard it would make September G-7 Dubai look like a walk in the park.
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LOL One man does not make the country. Your not sure either are you?? It may drop any amount of points. There may be huge spikes in the currency if it happened, but thats like saying how much would the USD drop if a dirty bomb went off in New York city?? You cant trade the markets by pondering the "What Ifs?"...What If Islamic Fanatics planted a dirty bomb in Paris due to the banning of Islamic headscarves etc in Schools? Euro would plumit!

Basically, I agree the USD in longer term is still going to get weaker, but unless your holding for very long term then you may end up with huge losses if the USD goes through a period of strength and you just keep selling. Also, as you mention you do trade both long and short sides, why concern yourself where the price will be in 2 years time? If the USD strengthens 1000 pips why not buy USD? If it weakes again, sell....All those who are long usd from ~1.29 are sitting on a nice 4-500pip gain so far, and they will have stop losses to lock in profits so I think anyone who has made those 4-500 pips in past week+ is doing pretty nicely. How many pips have you made going long Euros in that time? And if you were not long Euro and holding long term, why are you calling people fools who bought USD and made a profit? They can quickly reverse their trades in an instant when/if the EUR moves up again.
 
Quote from izeickl:

The EU does not care about the USD, they care about the Euro, if the Euro heads past 1.30 the EU will be hurting badly and we will have bank interventions,

That's a full blown presumption based on nothing but thin air. It is called "verbal intervention." The EUR/USD went from 1.0491 last March to 1.2929 a few days ago - that's 2,438 points with ZERO intervention. Yet you are so sure the ECB will intervene in 71 more points. Your view makes a LOT of good trading decision sense for sure.



whether this is just fighting the tide hoplessley remains to be seen.

The whole "remains to be seen" scenario is what I am pointing out - it is rediculous presuming that the EUR/USD is going down hundreds of more points and is turning around now. Those who trade based on the theory will A) get wiped in losses or B) get buried in massive drawdowns.



EU business is hurting as it is by the low USD, they would LOVE for the USD to head back down to 1.10 or lower.

But you just said that they don't care about the USD. Now you are saying they would love it?



How many points does "countless" equal,

"Countless" is a conceptual apparition in the minds of current USD longs based on the illusion that the USD has reversed its course and is now heading in the other direction.



if you mean retracing 20 whole cents then I agree, but, the USD can easily gain strength of a several hundred pips lasting a couple of months

EUR/USD fluctuates several hundred points in a few DAYS, many times in a single day. It doesn't need months.

"Easily gain strength?" Is it more probable to do that or to weaken further?





(Just look to what happend at the start of last June-August, 1000 pips the USD strengthend by) unless you were/are a long term investor such retracements will hurt badly if you keep going long into them.

You weren't posting on here about the EUR/USD then were you?




After 1.30 the ECB will be intervening like hell,

That's a full blown presumption based on nothing but thin air. It is called "verbal intervention." The EUR/USD went from 1.0491 last March to 1.2929 a few days ago - that's 2,438 points with ZERO intervention. Yet you are so sure the ECB will intervene in 71 more points. Are you sure your view makes good trading decision sense?

And, if intervention is such a good remedy and is so needed at 1.30, why doesn't the USA just intervene then and buy back the USD? ha! Does Greenspan even talk about the USA intervening? No. Never.


business in the EU will be crippled badly if its exports become so expensive to the US.

But you just said the EU doesn't care about the USD. It is the stated general consensus of the ECB that the countries that comprise EU take steps to run their economies more effeciently. That is ECB's goal. It is not to fret about the USD going up or down. That is for fretters like the talking Germany and France heads.



Also IF it ever got to 2.0 there would be many many huge retracements of 1000s of pips along the way, simply saying buy lots of euros now is silly unless your so certain 2.0 is achievable and willing to hold on for at least couple of years.

I'm not saying it.



LOL One man does not make the country. Your not sure either are you?? It may drop any amount of points. There may be huge spikes in the currency if it happened, but thats like saying how much would the USD drop if a dirty bomb went off in New York city??

That scenario is more likely to occur than the USD sustaining a climb in price.




You cant trade the markets by pondering the "What Ifs?"...What If Islamic Fanatics planted a dirty bomb in Paris due to the banning of Islamic headscarves etc in Schools? Euro would plumit!

It's "plummet." "plumit" is what you do when your toilet overflows. Or when you are sitting 650 points down in a long USD position.

Not necessarily (about the dirty bomb in Paris) since the EU is made up of 11 other nations. No, it would just be a reflection on the USD's leaders' poor judgement to wage war against "evil" causing the USD to ... plumit, and most assuredly persuade holders of USD that terrorism is here to stay and getting much stronger day to day. Unlike the USA would have others think, especially around election time.


Basically, I agree the USD in longer term is still going to get weaker,

Good.


but

You should not trade on "buts!" Rule 44987.5.


unless your holding for very long term then you may end up with huge losses if the USD goes through a period of strength and you just keep selling.

Probably, in fact I have a friend who is buried 1000 points down sitting on a huge USD long position with the same kind of mentality as has been circulating this week. And he only made the trade not that long ago. He is not happy at all.



Also, as you mention you do trade both long and short sides,

Yes I do.


why concern yourself where the price will be in 2 years time?

I don't.



If the USD strengthens 1000 pips why not buy USD?

Why not? Because if it did and you bought then you'd be sitting 1000 pips down faster than you could click sell.



If it weakes again, sell....

If it weakens again, you can always sell... at a huge loss... because you bit into this rumor in the first place that the USD's trend has now permanently reversed and it is definitely going up from here.



All those who are long usd from ~1.29 are sitting on a nice 4-500pip gain so far, and they will have stop losses to lock in profits

Perhaps, or perhaps the USD also had just as many reversals on it's way down 558 points too, so I highly doubt anyone is sitting "nicely" on a 400 to 500 point gain. It just doesn't work that way.

And if they are, as you clearly point out, there is strong impetus to take profits by S-E-L-L-I-N-G USD. Either way you look at it, USD is going to be sold, selling USD causes its price to go down - end.


so I think anyone who has made those 4-500 pips in past week+ is doing pretty nicely.

I agree.


How many pips have you made going long Euros in that time?

I don't count but it is somewhere in the range of 2 to 4 pips, 50 to over 100 times a day, every day - so far zero losses.



And if you were not long Euro and holding long term, why are you calling people fools.

I have NEVER called other traders "fools." Since you are saying I have, prove it by re-posting my statement here, pls.



who bought USD and made a profit?

That is a good question. I cannot think of anyone in the last two years and counting.



They can quickly reverse their trades in an instant when/if the EUR moves up again.
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They sure can. The quicker the better ... for them.

Cheers!

Sam
 
All things being equal, you get paid to be long euro's. The US has not really had a problem financing the deficits, but that interest rate differential provides a lot of headwind for the dollar.

The Democrat presidential candidates are vying to outdo each other as to who will be more protectionist. Probably it is just typical liberal Dem lying, but if the market began to get a whiff of protectionism in the offing, the euro could start looking expensive very quickly.
 
- How many pips have you made going long Euros in that time?

I don't count but it is somewhere in the range of 2 to 4 pips, 50
to over 100 times a day, every day - so far zero losses. -

ok ... you are really making the rest of us feel rather silly

I mean ... why should we even trade against you ?

if you never have a loss , then we can never win :p
 
the dollar really looked strong in the europe and early ny trading

ibut then it lost its short term momentum ... now was this due to end of month book squaring ahead of next weeks ECB meeting?
 
Quote from blackguard:

currently long Euro from 1.2444
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Hi Blackguard,

Can you tell us your reasoning for being long Euro at 1.2444?

What is your time frame? What is your TP and SL?

Are you scalping or longer term?

Sam
 
Quote from SethArb:

- How many pips have you made going long Euros in that time?

I don't count but it is somewhere in the range of 2 to 4 pips, 50
to over 100 times a day, every day - so far zero losses. -

ok ... you are really making the rest of us feel rather silly

I mean ... why should we even trade against you ?

if you never have a loss , then we can never win :p
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There are plenty of reasons! The main one is... I need to make a living! LOL..

Honestly though, Seth, I am not the one at your currency operator platform who clicks the buy or sell or close botton at a loss, am I?

I should be good for you because if you are losing you need to do better. Just like I used to lose ( I think I hold the record for most margin calls on demos ) 1000s of trades - I could never win.

I got sick and tired of it. I just made up my mind to try to figure out ways to NOT lose. Seth, there are only two ways to go, you either win or lose - it can't be both ways.

A price only goes up or down - it can't be both ways.

Based on this simple reality, I changed my trading structure. The market didn't change. My fellow traders didn't change. I did.

If you feel silly it is only you who are making yourself feel silly by losing. Just like I used to feel silly when I lost.

Sam
 
Quote from overload:

They sure can. The quicker the better ... for them.

Cheers!

Sam
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Lets condense things.

Firstly no need to be an arrogant prick about spelling.

You say all my words are "full blown presumption", so are yours. Unless your so arrogant you really do think you have some view of what will happen years down the line.

I said that the EU doesnt care about the USD yes. It doesnt care about keeping the USD weak to help America, it does care about keeping it stronger to help the EU, perhaps you couldnt grasp that.

Im not SO SURE that the ECB will be intervening at any specific level, obviously words are better as it costs them nothing, dont say it will never happen though, just look how much Japan has spent.


"You should not trade on "buts!"
Rule Arrogant Bastard number 25626....USD could get stronger BUT its unlikely...better not trade at all then.


"If it weakens again, you can always sell... at a huge loss... because you bit into this rumor in the first place that the USD's trend has now permanently reversed and it is definitely going up from here."


You say you go both long/short, and you also seem to have found the holy grail of 100 winning trades a day!(I bow down to your trading greatness), so are you the ONLY one who can buy USD and make a profit? I never said anywhere anything about a permanent reverseal either, but if USD strengthens by several hundreds of pips, damn right i want to buy USD to make a profit on part of the move.



who bought USD and made a profit?

That is a good question. I cannot think of anyone in the last two years and counting.


So you DONT go long/short then? Or you do, but you havent bought USD for over two years now obviously as you always make a profit and never lose. Oh and for the record, Ive bought USD and made lots of profit, the trick is, to sell when it gets weaker, buy when it gets stronger.....

I see in another post you have written

"I close between 50 and over 100 trades a day easy. I been live about 4 weeks now."

Truly you are great, your first ever 2100 trades all flawless.
 
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