http://randomroger.blogspot.com/2008/08/blogger-comes-back.html Interesting analysis. I posted it first in the FX trading forum by mistake, since it belongs here.
[x] Post delivers There are so many people long the Euro right now because they think it "has" to come back up off these lows. What many don't understand is exactly what the article above explains. We are on the verge of a major trend reversal. I already deposited 1k into a mini account to leverage the shit out of this potential move. Hey if i'm wrong its only 1k but if i'm right that 1k turns into 5k plus depending how much leverage i want to use. So far i'm short at 1.5503 with 4 mini lots, if i see a great spot to add with the 4hr chart i will with 4 more mini lots and ride this trend to zero or hero. Wow this comes across as pure poo fling but trust me i'm at least a 3rd level piker according to Livermore
The dollar strengthening is good for the canadian economy. I have half my savings in USD so that's good too, but it's not like I truly understand the forex markets.
Not bad for a piker eh? Still think we are going much further south over the course of the next month or two to around 1.45. Edit: It is amazing to me on other forums how many people are in denial that the USD strengthening is underway. Many can't believe we are this low and looking to get longs in all the way down to 1.5330. To me this is a clear sign to sell the Eur against the USD. Day trading forex will make you commit equity suicide.
Fundamentally USD$ just can't stregthen. It might be intermediate trend like we had in 2005 but eventually USD will collapse again and again and rate differential will make it just worse. even if Australia cuts 0.25% what will change? Healthy 5% premium still here And I think oil just can't crash - China has so many dollar and they need to put them somewhere so they will buy oil any price - high or low There is no sense, of course, to buy AUD right now, but eventually market forces will crash USD So everyone should stay alert Bu they way if USD continues to strengthen near term - it will crash multinationals profits so Dow will be a nice short at the beginning of Octover
As they say, this is how markets are made as our opinions differ. Every time i try to rationalize a trend from fundamentals it always bucks me. Right now we are poised for a massive break downward on the EUR USD. However since it is August we may range or drift higher so if we don't pass 1.5300 in the next couple weeks you may be right. Look at the most recent Euro breakout, looks very similar. If a breakout like that occurs say hello to 1000+ pips. Does anyone really know if there is rampant global inflation and the United States fed is the only bank poised to raise rates this year? Does anyone really know if oil prices are going to collapse further? I sure as hell don't. All i try to do is position myself to hop on for the ride. Why the ride runs, i could really care less because the reasons are always known after the fact.
The dollar move up could make sense, if we assume currency movements are long trends. As the excellent blog said, a rising dollar will have oil drop and that should encourage central banks to be less hawkish about inflation and drop their rates to bring back growth. This process will feed on itself, so as time goes on the US will look like a better and better place to park you money. Assets ARE cheap(er) and everyone loves a strengthening currency. But the move should be slow, the american banks must get their shit in order. Oil should drop to its fundamental levels, people say oil can't fall, it just did $30!
I see you having a lot of fun in this move. Fortune favours the brave but there are many brave bodies scatterd along that road. Enjoy the ride.
This plunge that just hit missed me because i closed out my over leveraged positions for the day. Crazy move with pretty much no volume. Looks like someone shit a brick and dumped all their Euros soon as Asia opened. I'd expect a retrace though.