Discussion in 'Forex' started by downrivertrader, Sep 21, 2006.
Just entered on the spike up...
Short @ 2850
Short @ 8977 (Long USDCAD)
Long USDJPY @ 116.19
Short BP @ 1.9041
Here's my view on the EURUSD right now. This pair has solidly distributed price since June 06. The boundaries for the distribution are fairly clear and balanced. Obviously a breakout is imminent, but which way will it go. I think most are trading North.
The North border is 2830 area which we are testing now. The South Border is 2570. The midrange level is 2720 and will be the key. If we break thru 2830 and settle above then the breakout will likely be up. If we trade down thru 2720 and settle below 2570 then the break will likely be down. Also this range could take a while to play out if it heads south.
I will cover my EC trade if spot settles up North of the 2830 area, my play now is to test the southern hemisphere. A very risky one obviously.
If you want to short term trade a move down on the EC trade. My key target levels today are: 2832, 2802 abd 2768.
A trade up thru the 2887 area should target 2943 and 2957.
Clear as mud.
The USDJPY is also at critical mass currently just above 116. The cards are set for a trip down to 114.60. I am betting against this move and long out of 116.19. If we can over take the 116.20 and hold then I see a retest of the 117.50 area. It is certainly riskly at this point, but I am giving it a whirl.
I am short CD (CAD Futures which is Long USDCAD). In the near term we must overtake the 1145 area and hold in spot. If we do this, there is a good chance of a strong move up in this pair. More to come on this nutty pair.
Here's a summary of my current positions as of Friday morning.
Short 50 contracts EC at 2850
Short 20 contracts CD at 8977
Short 10 contracts BP at 9041
Long 10 contracts USDJPY at 116.19
3:23 USD/CAD: Holding Just North of 1.1120] Boston, September 22. USD/CAD came
under an early downside test of the 1.1120 support level with momentum funds
gunning for stops. So far, they have been frustrated as the USD slips into
consolidation mode against most of the majors. Dealers note tremendous interest
to sell into bounces in USD/CAD, with offers noted thick in the 1.1150/60
region. USD/CAD trades at 1.1130.
It keeps hanging on and hanging on. The ledge looks very dangerous.
This was a good one.....
15:35 EUR/USD: Small Stops Tripping Off below 1.2800] Boston, September 22.
EUR/USD is falling back as position squaring ahead of the weekend begins to test
the resolve of speculators with both short time horizons and short pockets. A
cluster of small stops is in the process of being triggered in the 1.2790/95
area. Strong buying is expected on deeper dips toward 1.2755/60 but large stops
are seen if prices slip back into the old range that was topped by 1.2755. A
break below 1.2750 will destroy the psychology built up by yesterday"s poor
Philly Fed data and reinforce the notion that "dark forces" are keeping the
market bottled up. "dealers won"t be jumping out windows if 1.2750 breaks," said
one trader. "They"ll be able to step out, the bodies will be stacked so high."
***Lord Rees-Mogg on the State of the E.U.
I have been a reader of the European Journal for many years. Occasionally, I have written articles for it. I admire its approach of rational and scholarly Euroscepticism. I even have a family connection, as our youngest daughter, Annunziata, edited the magazine for three years.
There are many people who would enjoy reading it, thereby supporting the cause of European independence, which is equally an interest for Europeans themselves and for Americans. The European Commission in Brussels is deeply suspicious of the U.S., and often actively hostile.
The September issue has a particularly important article written by Vaclav Klaus, who is the president of the Czech Republic. He lists six objectives for Europe. I would myself accept these six objectives as a program for the new Europe, infinitely preferable to the Constitutional Treaty that was drafted by Giscard dâEstaing, the ex-president of France. This is the Klaus program:
Â· Europe must be free, democratic, and prosperous. It will not be achieved by democratic deficit, by supranationalism, by statism, or by an increase in legislating, monitoring, and regulating us
Â· Europe needs a system of ideas which must be based on freedom, personal responsibility, individualism, natural caring for others, and a genuinely moral conduct of life
Â· Europe needs a political system which must not be destroyed by a postmodern interpretation of human rights (with its emphasis on positive rights, with its dominance of group rights and entitlements over individual rights and responsibilities, and with its denationalization of citizenship), by the weakening of democratic institutions which have irreplaceable roots exclusively on the territory of the statesâ¦by the continental-wide rent-seeking or various NGOs
Â· Europe needs an economic system which must not be damaged by excessive government regulation, by fiscal deficits, by heavy bureaucratic control, by attempts to perfect markets by means of constructing âoptimalâ market structures, by huge subsidies to privileged or protected industries and firms, or by heavy labor market legislation
Â· Europe needs a social system which must not be wrecked by all imaginable kinds of disincentives, by more than generous welfare payments, by large-scale income redistribution, or by all other forms of government paternalism
Â· Europe needs a system of relations and relationships of individual countries which must not be based on false internationalism, on supranational organizations, and on a misunderstanding of globalization and of externalities, but on the good neighborliness of free, sovereign countries and on international pacts and agreements.
The federalist program, unfortunately, still has the backing of Germany, and of the French, Italian, and Spanish governments. The Constitution was rejected by the voters of France and the Netherlands, but has been silently implemented by the commission.
In January 2007, Germany will take the chair of the European Union for six months. It is Angela Merkelâs ambition to use that period to revive the Constitution. Under the proposed Constitution, Germany would have become the predominant power in a European federation.
The model that Germany supports is the federation of German states that the German statesman Bismarck established in the 1860s and 1870s. Just as Abraham Lincoln forcibly reunited the United States by war in the 1860s, Bismarck reunited Germany, defeating Austria and France, and bullying Bavaria. Naturally, the Czechs, who are not a German people, do not now want to join a Germanic federation of Europe. Nor do the British. Such a federation would certainly be an unreliable ally for the United States.
In my view, we all need to compare the Klaus plan for Europe -- it is not a Constitution -- and the Franco-Germany Constitution. I know which one I prefer. Chancellor Merkelâs attempt to impose a federal system will, in my view, destroy the liberty of Europe if it succeeds, and will risk splitting the European Union if it fails.
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