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."


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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
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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,


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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.

 


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Biotech/COVID-19

Here's where (and how) you are most likely to catch COVID - new study

 

Here’s where (and how) you are most likely to catch COVID – new study

VGstockstudio/Shutterstock

Courtesy of Trish Greenhalgh, University of Oxford; Jose-Luis Jimenez, University of Colorado Boulder; Shelly Miller, University of Col...



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Zero Hedge

Will The Market Flip Green This Week? Here Are The 15 Things On Goldman's Checklist

Courtesy of ZeroHedge View original post here.

Goldman's flow trader Scott Rubner called the year-end meltup and Santa Rally with perfect accuracy, although his call for a continuation of the meltup into January and the new year has so far proven painfully wrong. And with sentiment imploding over the past three weeks, turning from euphoric to cataclysmic in just a matter of days, it is hardly surpris...



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ValueWalk

These Are the Ten Best Performing Options Trading Funds

By Aman Jain. Originally published at ValueWalk.

Mutual Funds typically invest in stocks and fixed-income securities. However, there are funds that, along with investing in such securities, may also invest in derivatives contracts such as options and futures. Such types of investing allow funds to hedge their risk, and for investors, it helps them to diversify their portfolios. Let’s take a look at the ten best performing options trading funds.

Q4 2021 hedge fund letters, conferences and more

Ten Best Performing Options Trading Funds

We have referred to the last one-year return numbers (from ...



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Chart School

Bitcoin Swings Down to Support

Courtesy of Read the Ticker

Come on! Seriously do you think a 400% rally for Bitcoin was going to be given to the public easily. Without any pain! Come on muppets!



The uniformed (public) buy when price is rising or breaking new highs, the informed buy when price is falling or breaking lows.



The informed have to do it this way as they are large volume players and the only way they can buy large volume is to create chaos. The chaos brings to the market the weak holders and a forced sell. Price is moved to where the volume can be accumulated, in a bull trend that is down to critical support.



Of course if price is in a true bull market the 'chaos' created should not break critical long term trend signals, ...



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Kimble Charting Solutions

Nasdaq Weakness Has Bears Circling Tech Stocks!

Courtesy of Chris Kimble

One theme over the past several months has been tech stock’s under-performance. And 2022 seems to be amplifying this theme as we kick off the new year.

Today’s chart focus is on the ratio of the Nasdaq Composite to the S&P 500 Index. We have shared this ratio a few times recently as the price pattern has become a concern.

As you can see in the chart, there’s a potential that the ratio double topped last year at the 2000 highs. And weakness this month has it attempting to break dual support at...



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Politics

What Supreme Court's block of vaccine mandate for large businesses will mean for public health: 4 questions answered

 

What Supreme Court’s block of vaccine mandate for large businesses will mean for public health: 4 questions answered

New York City’s vaccine mandates are unaffected by the court ruling. AP Photo/Mary Altaffer

Courtesy of Debbie Kaminer, Baruch College, CUNY

The U.S. Supreme Court on Jan. 13, 2022, blocke...



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Digital Currencies

The metaverse is money and crypto is king - why you'll be on a blockchain when you're hopping

 

The metaverse is money and crypto is king – why you’ll be on a blockchain when you’re virtual-world hopping

In the metaverse, your avatar, the clothes it wears and the things it carries belong to you thanks to blockchain. Duncan Rawlinson - Duncan.co/Flickr, CC BY-NC

Courtesy of Rabindra Ratan, Michigan State University and Dar Meshi, Michigan State University ...



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Promotions

Phil's Interview on Options Trading with TD Bank

TD Bank's host Bryan Rogers interviewed Phil on June 10 as part of TD's Options Education Month. If you missed the program, be sure to watch the video below. It should be required viewing for anyone trading or thinking about trading using options. 

Watch here:

TD's webinar with Phil (link) or right here at PSW

Screenshots of TD's slides illustrating Phil's examples:

 

 

&n...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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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...

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