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Key Week for EURUSD Traders

  1. Looks like this may be a MAJOR KEY WEEK for EURUSD traders. If not this week, then certainly soon. The bottom area of of 1.1867 to 1.1977 that is only a few ticks away will almost certainly be tested. If it does not hold here, I think (key word) the pair could head back to the 1.0563 area in due time.

    There are plenty of fib clusters, etc at this bottom. It is a MAJOR level to many, many eyes. One reason it is key to me is that it is the 261.8% price extension of the very first move up from the all time low of the pair. All reasons here are very significant.

    If the near term bottom does give way, then I would guess(another key word) that a good many big boys and girls who are long from way down under may begin to question the validity of holding on and the decent could be rapid as they begin to sell and take profits.

    I think there is a good possibility that the bottom will give way quickly. There are probably a zillion stops in this area. We may retrace back up into this area, but it should be interesting to say the least. Need to exercise extreme caution IMHO.

    If the near term bottom does hold, then we may be range bound again and it will be time to re-think everything. Maybe the much anticipated head and shoulders pattern will re-emerge. It is certainly a possibility or possibly another double top in the 1.2540 area also and then down (or up).

    I use mostly price extensions with fib, rather than price retracements. My studies validate both of these key areas. I am sure there are a zillion different fib interpretations of this pair.

    I would imagine many of you are short from somewhere up above like me, or maybe you covered on Friday close. I thought it was very interesting how we closed on the lows on Firday. There was no covering that I could detect. This certainly sent a message to me that we are going to test this bottom. We may open up and begin a retracement, who knows, but the bottom line (no pun intended) is that we are at critical mass. It is upon us as they say.

    I am short from a good distance above this approach and I my plan is to stay short thru the bottom, however there will almost certainly be some strong buying at this level and I am not too sure how long I will stay with a bounce of any magnitude. Once below this level, my conviction would change.

    I would be interested in hearing from others of you who have some ideas. I am sure there are many e-wave views out there. This is much to complicated for me, but I enjoy learning about the price extensions predicted by this method. I am a generalist and self-taught trader and by no means a technician to any degree. This is just my "Vision". I would like to hear some other stories or views of this. I will do my best to keep track of things here once and a while so we can follow the path.

    If I traded on fundamentals, I would never think the USD could make this rally. I am very gloom and doom when it comes to our current economic situation. Frankly, scared too death. The warning signs are everywhere in my opinion. I have moved much of my longer term investments out of the U.S. and/or into hard assets. But I am a trader and not a fundamentalist.

    Good Trading to all,

    VT
     
  2. you're wrong.

    my indicators show EUR/USD is going UP as much as 200 pips - maybe more.

    current = 1.2039 (average price).

    Coinz
     
  3. hi vision ...

    do you mind telling us on ET approx what day or level you are short from ?

    what is your usual risk / reward on FX trades esp
    since the pairs can move so much daily and you
    seem to be someone who holds on a longer timeframe (? )


    :)
     
  4. As I have said before I think there is a very good reason why the dollar is bid and it is the HIA. Between now and the end of the year US companies are going to repatriate billions of dollars and this huge flow underpins the dollar.

    2006 should be different though - I think that all the talk will be of deficits and devaluations again.
     
  5. funny, I could swear I posted to this thread.
     
  6. like butter in a blast furnace. the euro at major support.
     
  7. Not sure how much impact it will have but a large UK bank has to buy a lot of cable tommorow for the 11am fix.
     
  8. I am not saying that I am calling the down move, only that the current level will be the catalyst for a move back up or move on down.

    Are you saying there will be no test of the low, just a move up of 200 pips? If so, why do you think that will be the case?
     
  9. This Monthly EUR/USD chart says it all to me - IMO if the support level @ 1.1750 gets punched through there could be a real slide...

    At any rate, clearly the long-term uptrend is over for now.

    I am short from 1.2432 and my stop is now @ B/E.

    This could be a major drop down to 50% Fibo @ 1.0750 or so...

    Also, there was a monster RSI divergence when price was at 1.3500 or so and then started to move down... and this was after the third big wave up.
     
  10. I do not trade spot. I trade Euro FX (futures). My trades are normally trendline driven. I am only short from 1.2192. I like to trade the 987 minute chart, but that is not always the case. Depends on the set up I see. Sometimes I trade the 233 minute chart, or the hourly. My goal is get myself fully positioned in a longer term trade with multiple contracts. I like to manage my risk down and get fully loaded up in the trade. I am no big player or anything like that, just like to get my maximum position and hold it longer term. I am still not fully positioned and won't be until it is clearer that the near term bottom is safely breached, likely after the first significant run back at it.

    When I first start a trade, my risk is not great and I use a maximum of 5% of equity on each trade. Normally, less but never more. My stop is generally above a swing high or low going into a trendline move. I add to the position as it "acts right" and manage my initial risk downward as possible. I normally do not have a specific target point only a guideline of where I think the trade has potential to go. I try to let price determine where that point is. If it is clear that a central bank has jumped in, I will often get out when the bid or ask lights up on the Globex. This is the reason I like trading Euro futures. (and my transaction cost is only $2.50 per side). After you watch the ticker long enough, you can definitely tell when someone with deep pockets is hitting the bid or ask.

    Not sure if that answers your question, but that is the best I can describe it.
     
  11. I did read a post that you had made about this before. Quite honestly, I am weak on this subject and would like to learn more. Can you elaborate on this any or maybe point me somewhere to do some reading?
     
  12. because "current levels" don't stay "current."

    skz
     
  13. how does one know this unless one subscribes to thompson or maybe bloomberg ?

    - If it is clear that a central bank has jumped in-
     

  14. Okay. I understand perfectly. Thanks for clearing it up.
     
  15. I don't really care if it is a CB, Hedge or anyone defending option positions, only that major orders are showing up.

    I just took a snapshot of the Swissy on the CME. Do you notice anything that might be a clue in the order matrix. Do you think these were buy or sell orders?

    Incidentally, this is inverse so if you do think these are buy orders then that means the dollar will weaken and a EUR/USD gain is likely.

    Likewise, if this is a sell order, someone really thinks we are headed south.
     
  16. see how simple it is? :)

    and you thought forex was complex....

    skz
     
  17. I tend to side with Coinz in the near term, we need some Eur strength. It is hard to imagine how much more we can slide in the near term.
     

  18. I'm not sure I understand the logic in this - it seems to ignore the mechanics of the market.

    For every one of those trades, there was a buyer AND a seller, as there is every single time a futures contract is traded/printed on matrix or tape.

    Yes, there was a lot of trades at those 2 price levels, but it is folly to try to differentiate them as "Buy" or "Sell" orders - because they are exactly BOTH. For every buyer there was a seller and vice versa. It simply displays the volume of trades at that level, without prejudice to buying or selling - since by definition, it was both in order for a trade to take place.

    If the sell side orders were one big fund or bank, there was enough buyers (big or small) to negate them and provide support so far. Vice versa for a big buy order that was absorbed by seller(s).

    The only thing that will determine which way prices will go is how aggressive the buyers are in raising the bids or how aggressive the sellers are in dropping the ask as prices continue to change in the future, in relation to those aforementioned price levels. But looking at a static representation of the volume doesn't tell whether buyers or sellers were more aggressive at that level.

    It seems the thing to do is watch the price/volume action as the level gets supported or penetrated - but even as that happens either way, there will still be an equal number of buyers and sellers (in aggregate of their trades) for every contract traded.

    Just my .02 and also I welcome any proof or solid argument that I am wrong in this assessment.

    Respectfully,

    Paul
     
  19. Pair EURUSD
    Time Fram Tue 09/27/05 04:00 AM Tue 10/04/05 10:11 AM 174 Hours
    Trend South
    Enter 1.2138 1.2169 1.2200 1.2232
    PT 1.1861 1.1840 1.1819 1.1799
    S/L 1.2263 1.2418 1.2574 1.2730
    Trail (Deci) (0.0014) (0.0014) (0.0014) (0.0014)
     
  20. I agree with vision's assessment, overall. However, you won't find me adding short positions on the EUR at this level unless we see a major and conclusive break of the bottom @ 1.1867. Yes, rates are going up (supposedly) - but my spidey sense tells me this is going to be coming to a close very shortly as rates reach "neutral" levels in the neighborhood of 4.00/4.25 percent.

    Yes, dollars are going to be repatriated - but this is still a limited number, and unfortunately in FOREX, a number that large is still a stone's drop in a pond.

    What I still do not like (and I am traditionally a dollar bull) is the following:

    1. Massive unbalances in trade and budget (the ol' twin defs)
    2. Greenie leaving in January
    3. Oil and the US's dependency
    4. Fallout from the last several storms
    5. Various geopolitical landscapes with Iran

    I tell you, as sure as the sun will rise, that once people think rates are done rising, the dollar will be done rising. If I am wrong on that, I am wrong. But that is the evidence before me.

    Cheers,

    Ivan
     
  21. Paul,

    In general you are absolutely correct. Many times, particularly in the Asian session, you can watch the bid (or ask) get smacked up the ladder. It just gobbles everything up. It can be helpful on short term trades and to get a handle on support or resistance levels though.

    The fact that someone is willing to gobble up 7,000-14,000 or so contracts at a particular time just makes me a little more alert sometimes. :)
     
  22. am watching the commitment of traders report which has interesting info (like the distribution of the open interest)

    Sherlock
     

  23. Vision,

    As you read this, please know I'm not trying to beat a dead horse or be disparaging, but simply to have an intellectual discussion about markets and therefore I mean no insult.

    Couldn't you also say that the fact that someone is willing to be the seller of those same 7,000 - 14,000 at that price level is just as significant? (Without them, there would be no trade at that level, right?)

    My point is that you seem to be trying to assign some type of directional bias or meaning to the fact that those two price points were active in terms of contract volume.

    When you said "I wonder if those were buy or sell orders" my point was exactly that they were both.

    My contention is that either you are forgetting the mechanics of the market or that you are biased into seeing what you want to see.

    It is the price movement AFTER the big volume/stalled prices that is indicative of a higher probability of a directional move - not just the fact that a large amount of people (or big orders) nullified each other on both the buy and sell side of the equation at a couple of price levels.

    If anything, on the snapshot that you had of the matrix, it showed indecision or market stalemate, not bias IMO.

    Respectfully,

    Paul
     
  24. since I do not have additional access to orderflow - volume info from other sources quoting the spot - foward market

    I sometimes see size done in EUR futures etc that
    can show where the short term trend might have
    to reverse or slow down to congest.

    -It is the price movement AFTER the big volume/stalled prices that is indicative of a higher probability of a directional move - not just the fact that a large amount of people (or big orders) nullified each other on both the buy and sell side of the equation at a couple of price levels-
     
  25. Yes. I see both of your points and in general I agree. I think I may have got us off on the wrong track with this discussion. It was not my intent and this is not part of overall trading plan. If this starts occurring a key s/r level, I just take notice.


    Good points both of you.
     
  26. the master of analysis points out "once people think rates are done rising, the dollar will be done rising."

    How can one argue with that?

    A good question, though, at this point may be, how far will it go?

    If the current situation remains, cannot the Fed simply continue jacking up the interest rate?

    For another year? another two years? three?

    will we return to the days of 15% interest?

    If so, will not the USD simply out-muscle all other currencies that have not raised interest rates to keep up?

    If that happens, and if the euro zone continues to turn in poor numbers, is it not feasible for EUR/USD to move to under 0.8000?
     
  27. Your sarcasm aside (re master comment), you may think this is obvious, but so many people here have forgotten it time and time again. I've been harping about it forever, and you know I have. I'm just trying to help.

    I believe Al will bump min 1, most likely 2 and then he'll be off to retirement, having done what he said he wanted to: "Return fed rate to neutral at 4.25%". Then, you'll see a pause. Remember to look at what the market prices in. If, after the next bump, the market prices in one additional rise, then that is it. The dollar will be at it's essental equinox.
     
  28. "its essential equinox," Ivan... "its essential equinox."

    one thing you didn't mention: This market is getting its signals from Janet Yellen.

    she's the butch masculine bitch who caused the stampede out of the USD last year to 1.3665 against the euro.

    You're trading Janet's words.

    skz

    <img src=http://finance.news.bg/photos/people/america/Janet%20Yellen.JPG>
    "the forex market does what I say!" - Janet Yellen

    http://news.google.com/news?lr=&ie=UTF-8&oe=UTF-8&q=Janet Yellen&sa=N&tab=wn
     
  29. Did you not like my equinox quotable? Is that why you mentioned it like you did?
     
  30. yo, Ivan, don't get me wrong.

    I meant it when I said you are a master analyzer.

    Master speller, though, can be debated. :D

    What's your take on the coming MCF (massive credit failure) scenario?
     
  31. I have no comment on the "MCF". And as for spelling, when you can speak as many languages as I can, you earn the right to criticise. :)
     
  32. *ahem* "criticize ."

    I speak message boardese. :)

    1.2062
     
  33. Well, Thursday evening 9/29 and I would say we are officially in coiled spring status. Wonder if we will have to wait thru the weekend and into next week before top or bottom of monitor blows off.:eek:
     
  34. *ahem*
    "Criticise," is how it's spelled in the Queen's English.

    Just like "analyse" or any other "ize" you want. You'd know that if you ever got out.

    Put that in your pipe and smoke it.
     
  35. Did you guys see this one. Talk about squawking.


    Boston, October 3:
    With markets very quiet so far in the States, dealers are looking at what if
    scenarios. One of the more interesting points of conjecture is at what point
    does Warren Buffett throw in the towel on his bearish USD bet. The answer
    appears to be 1.1675 if market scuttlebutt is true. Buffett is rumored to have
    set a stop on his gargantuan EUR/USD position at that level. So much for the
    five-year time frame Mr. Buffett discussed on CNBC earlier this year.
    Next up for the market is the September ISM report. A dip to 52.5 is forecast.
     
  36. Oh yeah. Buffet put in a stop with citi london at 1.1675.

    'I say old chap. If Eur/USD hits 1.1675, would you mind buying about 10 billion USD for me? Try to get that within, say five pips if you can. TKU TTFN.'

    Betcha gates front runs him with a stop at 1.1695. Poor warren shouldn't have opened his mouth.

    Hey... if you get to 17 the figure, you might want to try to get short EUR before them. A billion might be enough to trigger off those stops... go ahead... push it.

    Whatever.
     
  37. I have drawn a big pink line on my charts at this level. :p
     
  38. he's not gonna do that.

    he wouldn't even consider bailing until way under $1.

    you're an idiot, drsteph.

    skz
     
  39. Well the proverbial coiled spring is wound up very tightly. I think the range has been nothing over the last 36 or so hours. Get ready for monitors to blow up soon.

    IMO, we are at a key point now....before (or if) we reach the bottom. Just under the 161.8 retracement of the very high on the highest. From this point a strong move up would signal a reversal....a strong move away from this point means there will be more downside.

    I have these reversal levels at 1.1963 on the spot and 1.1973 on the futures. Don't get me wrong the bottom is important, but this is the turning point.

    We have arrived.
     
  40. EUR/USD reached 1.2204 today. :D
     
  41. well, from 1.2039 to 1.2204 is 165-pips.

    we're gettin' closer. :D
     
  42. I may have to settle for being 35-pips off! :D

    anyone ever trade until they feel like they're gonna throw up?

    current 1.2166