Posts Tagged ‘EUR/USD’

Jim Rogers: “I Am Buying Gold For A Relief Rally” But All Fiat Currencies Are Doomed

Courtesy of Tyler Durden

Coins in a Cash Box

On one hand you have BNP revising their mid-term EURUSD forecast to 0.98, on the other you have such pessimists as Jim Rogers saying to buy the Euro. Who to trust anymore? Granted, Rogers’ thesis is only predicated on a a relief rally, pretty much the same as what we suggested when we saw the Goldman downgrade of the EURUSD, and immediately beckoned readers to get right back in. We consider the +50,000 pips picked in the ensuing week a direct gift from god (or at least his favorite worker). At this point the relief rally has likely fizzled, and the direction now is indeed down, at least until the next time the CFTC notes the net EUR shorts have hit a fresh record. Back to Rogers: in the long-term, Jim is just as bearish as always: "The European governments are not getting their act together, not at all. All paper money is flawed, nearly every currency in the world."

Rogers on European credibility: "If Greece went bankrupt it would send the signal to the world, and to the rest of Europe – ok, we’re not going to let people lie about their finance anymore, we are not going to let them spend money they don’t have, we are going to run a tight ship. That means the euro would be an extremely sound currency, it would the old Deutsche Mark." On Keynesianism: "You can’t keep spending money you don’t have because eventually the whole thing collapse in a house of cards." On the transition to reality: "I am not suggesting it is going to be a good time, don’t get me wrong. But if you wait 5 years from now, 10 years from now, when there is nothing you can do, and the whole system collapses, then you have real chaos in the streets, then you have Greece never recovering. In the US we have had states go bankrupt, cities go bankrupt, counties go bankrupt. It didn’t end the US, it didn’t end the US dollar." And on the flaws of our political system, which are just as applicable to our own president: "Greece is just trying to get through the next election, I am trying to figure out what’s good for country, what’s good for the world, what’s good for Europe, what’s good for the financial system."


Tags: , , , , , , , , , , ,




EUR/USD: What Moves You?

EUR/USD: What Moves You?

It’s not the news that creates forex market trends — it’s how traders interpret the news.

Courtesy of EWI’s Vadim Pokhlebkin

What moves currency markets? "The news" is how most forex traders would undoubtedly answer. Economic, political, you name it — events around the world are almost universally believed to shape trends in currencies.

A January 14 news story, for example, was high up on the roster of events that supposedly have a major impact on the euro-dollar exchange rate. That morning, the European Central Bank announced it was leaving the "interest rate unchanged at the record low of 1% for an eighth successive month." (FT.com)

The euro fell against the U.S. dollar after the news. But could it have rallied instead? You bet. In fact, traditional forex analysis says it should have. Here’s why.

Analysts always say that the higher a country’s interest rates, the more attractive its assets are to foreign investors — and, in turn, the stronger its currency. Well, U.S. interest rates are now at 0-.25% and in Europe, at 1%, they are 3 to 4 times higher. Isn’t that wildly bullish for the EUR? Apparently not, and wait till you hear why — because in today’s announcement ECB president Jean-Claude Trichet warned that European recovery would be “bumpy.” Ha!

By no means is this the first time a supposedly bullish event failed to lift the market. On June 6, 2007, for example, the ECB raised interest rates. Bullish, right? But the euro didn’t gain that day, either — the U.S. dollar did.

Watch forex markets with these "inconsistencies" in mind and you’ll see them often. In time you realize that it’s not news that creates market trends — it’s how traders interpret the news. That’s a subtle — but hugely important — distinction.

So the real question becomes: What determines how traders interpret the news? The Elliott Wave Principle answers that question head-on: social mood — i.e., how they collectively feel. Currency traders in a bullish mood disregard bad news and buy, leaving it to analysts to "explain" why. Bearishly-biased traders find "reasons" to sell even after the rosiest of economic reports.

If you know traders’ bias, you know the trend. How do you know? Watch Elliott wave patterns in forex charts – it’s reflected in there, on all time frames.

Today, the EUR/USD stands well below its November peak
continue reading


Tags: , , , , , ,




DGDF?

DGDF?dollar

Courtesy of Macro Man

Is the dollar going down forever? Well, to paraphrase Benjamin Franklin, nothing is forever except death and taxes, but it certainly seems that the DGDF crowd is having their day (week? month? quarter?) in the sun.

The normative question of whether the dollar should go down "forever" is an emotive one; Macro Man is generally sceptical of such arguments, particularly in the current context when the US current acccount deficit (usual source of DGDF $ bearishness) is eminently reasonable by the standards of the past decade or so. Moreover, a number of the currencies that have performed best against the buck recently (here’s lookin’ at you, NZD and ZAR!) haven’t exactly been paragons of balance of payment virtue themselves.

However, while market focus is usually (and justifiably) on the flow of currency movements (i.e., portfolio flow versus the US need to finance an ongoing c/a deficit), it seems as if the current bout of dollar weakness may have more to do with a stock adjustment…i.e., Asian and Middles East CBs reducing the share of dollars in the reserve bounties that they’ve accumulated over the past year or so.

Throw in a step-shift in the perceived equilibrium level of USD/JPY, thanks to DPJ laissez-faire, add a dash of flow recycling from Asian CBs standing in the way of overdue currency appreciation (so what else is new?) , and throw in a pinch of dollar-negative seasonality, and these are the things of which market trends are made.

EUR/USD has broken up to new highs for the year, courtesy of both public and private-sector flow. Near-term resistance lies at last December’s high of 1.4719 and the Sep ’08 high of 1.4866; above those levels, there’s quite a bit of fresh air.

The breakout was confirmed, or indeed foreshadowed, by therally in precious metals a few weeks ago. Gold is not far below its nominal high of 1032 (though obviously well below its real high), but there appears to be more near-term upside in silver, which has broken and held the key $16 level.

There are still a few holes in the DGDF story, however, particularly if it’s one predicated on a cyclical rebound. Base metals have been taken to the smelter recently (boom,


continue reading


Tags: ,




Wanted: A Soaring Dollar

Wanted: A Soaring Dollar

soaring dollarCourtesy of Tim Knight at Slope of Hope

The snare drum you hear in the background is the musical prelude to a big shift in currencies. If, as I anticipate, the EUR/USD starts to tumble (while, naturally, the dollar soars), we’ll have everything we need for equities to start falling to pieces.

One of the charts from EWI’s Short-Term Update, shown below, tells the story superbly. Notice how the slope (err, not "Slope" slope, but the regular slope), represented by the series of diagonal lines, gets decreasingly steep. This implies to me a tipping point that has either taken place or will take place in the near future.

0831-euro 

I would also add that today is the first day in a while that the big profits that showed up in my account at the opening bell stuck around for the entire day. The only short position I closed was FXP, early in the morning; otherwise, I’m still short virtually across the board.

I’ll probably do a post later tonight. I need to – what else? – catch up on my charts.

 


Tags: , ,




 
 
 

Zero Hedge

Italian Cases Soar Past 300 As EU Stubbornly Refuses To Close Borders; 10 Dead: Live Updates

Courtesy of ZeroHedge View original post here.

Summary:

  • WHO warns the rest of the world "is not ready for the virus to spread..."

  • CDC warns Americans "should prepare for possible community spread" of virus.

  • Italy cases spike to 322; deaths hit 10

  • HHS Sec. Azar warns US lacks stockpiles of masks

  • Italy Hotel in Lockdown ...



more from Tyler

Phil's Favorites

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



more from Ilene

Biotech & Health

World economy flashes red over coronavirus - with strange echoes of 1880s Yellow Peril hysteria

 

World economy flashes red over coronavirus – with strange echoes of 1880s Yellow Peril hysteria

Courtesy of John Weeks, SOAS, University of London

As the novel coronavirus pandemic continues to unfold, travel restrictions are being imposed around the world. China is the main target, with various countries including Australia, Canada and the US placing different restrictions on people who have travelled through the country ...



more from Biotech

Kimble Charting Solutions

Dow Industrials Reversal Lower Could Be Double Whammy for Stock Bulls!

Courtesy of Chris Kimble

Dow Jones Industrial Average “monthly” Chart

The Dow Industrials have spent the past 70 years in a wide rising price channel marked by each (1). And the past 25 years have seen prices test and pull back from the upper end of that channel.

The current bull market cycle has seen stocks rise sharply off the 2009 lows toward the upper end of that channel once more.

In fact, the Dow has been hovering near the topside of that price channel for several months.

But just as the Dow is kissing the top of this channel, it might be creating back-to-back “monthly” bearish ...



more from Kimble C.S.

Insider Scoop

Benzinga's Top Upgrades, Downgrades For February 25, 2020

Courtesy of Benzinga

Upgrades
  • Sidoti & Co. changed the rating for FormFactor Inc (NASDAQ: FORM) from Neutral to Buy. For the fourth quarter, FormFactor had an EPS of $0.41, compared to year-ago quarter EPS of $0.31. The stock has a 52-week-high of $28.58 and a 52-week-low of $14.20. FormFactor's stock last closed at $23.16 per share.
Downgrades
  • Dougherty downgraded the stock for Palo Alto Networks Inc (NYSE: PANW) from Buy to Neutral. Palo Alto Networks earned $1.19 in the second quarter. The stock has a...


http://www.insidercow.com/ more from Insider

The Technical Traders

Yield Curve Patterns - What To Expect In 2020

Courtesy of Technical Traders

Quite a bit of information can be gleaned from the US Treasury Yield Curve charts.  There are two very interesting components that we identified from the Yield Curve charts below.  First, the bottom in late 2018 was a very important price bottom in the US markets.  That low presented a very deep bottom in the Yield Curve 30Y-10Y chart.  We believe this bottom set up a very dynamic shift in the capital markets that present the current risk factor throughout must of the rest of the world.  Second, this same December 2018 price bottom set up a very unique consolidation pattern on the 10Y-3Y Yield Curve chart.  This pattern has been seen before, in late 1997-1998 and late 2005-2008.

...

more from Tech. Traders

Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

more from Chart School

Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



more from Our Members

Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



more from Bitcoin

ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



more from ValueWalk

Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



more from Lee

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.