If we see a weakening of USD overall - with USDJPY below 103.15 - then a real EURUSD bounce will get much more credible. But until then, the EURUSD will continue to be volatile, I think. EURJPY doesn't look all that bullish to me yet, considering trend channel last weeks, or months even. edit: from Thomson this morning - [08:07 EUR/USD: A Deeper Correction Ahead If 1.2940 Breaks] London, November 23: The markets are pondering the likelihood of a deeper correction in [EUR/USD] this morning and we now feel that if 1.2940 is broken on the downside then bullish sentiment would be dampened in the short-term. 1.2975 was hit overnight as a Tokyo holiday affected market saw decent two-way actions. Some had expected to see a thin market but with the US out for "Thanksgiving" on Thursday and Friday we are now seeing the trading week being squeezed into what remains. Stops tripped on the dip back below 1.2990 and larger stops will be neutralized on a slip to below 1.2950 but at present they do not look in danger. Intraday early numbers showed German 3Q GDP at 0.1% Qtr/Qtr and 1.3% Yr/Yr. The drag on growth came from net exports, as exports plummeted -1.1% over the quarter while imports jumped 4.3%. Buyers are this morning touted as being below 1.3000 at 1.2990 and below 1.2960. The charts this morning suggest that we are in for a longer period of consolidation before we see the pair move higher to retest the historic highs. Further Eurozone data is due at 08:30 GMT in the form of Italian Trade numbers and 09:00 GMT with EZ New Industrial Orders likely to be EUR negative if the consensus -0.1% is released. Option talk this morning only finds further 1.3000 and 1.3050 expiries later today at the NY cut with the 1.3100 barrier that rolls off Friday now touted to trigger a EUR25Mn payout if triggered. Offers currently seen 1.3015/20.
With US names buying USDCHF too now, I would tread carefully indeed. The atmosphere feels very heavy - I took a EURUSD leg down to offset and get into EURJPY again - but I don't like the situation very much - slightly negative now - although just a handful of ticks. Got to get a handle on where they want to move the markets - well, stronger USD seems obvious with some profits being taken before the year end. Getting out of the way of the USD with some EURJPY safeguarding seems only prudent here.
From 4cast: The weight of USD shorts is making buy side progress easier so far in the European session, but beyond the short termers looking for barriers at 1.3100 on EUR/USD remaining intact through expiry on Friday, sales desks report the "shrewd" more medium term investors are still looking for EUR buy levels. It's a generally similar story on USD/JPY where here is no real belief that MoF is ready to send in the BoJ, but with a US holiday and the end of the month approaching, there are a few JPY longs deciding that moderate profits inked in the book might be a wiser approach than the possibility of MoF deciding holiday affected markets are too good an opportunity to miss. PB
Done. I'm on page 10 of today's FT Financial Times first section, 'Strategy for funds in the 21st Century' in case anyone is interested. My mom is proud
Will try and get a copy of that. It will be good reading, for sure. Best of luck - and thanks for the heads up - this time I get in. A little late - but still good for 9 ticks. I guess you can add me to the list of people in debt to you.
I've read it (nice going with 12% YTD - sure this will improve after today) - here is the link for others. http://news.ft.com/cms/s/42885d34-3cf5-11d9-bb7b-00000e2511c8.html GBP has broken previous resistance and looking to head to next level - 8771. EUR looking to follow suite with new highs beckoning. First real move post the damp squib G20 - I also went long EUR after that little spurt which seems to have gained impetus now. Chinook you trading??