Good morning everyone, I have only a moment to scan the Euro because once again my day job is interfering with my trading. The key levels to watch I think are yesterday's high at 12193 and the low of 12149. A break above may take us up to 12216 to 12250. The 12216 is the more likely target...if we manage to make it above this level. I would will be seriously looking at a short position if we make this level. Below the 12149 level is an indication that a correction is underway to a market that is overbought right now. Go short on a trade below for 50% correction to the 12078 level. Short appears to be the preferred view. I will try to check in later to see how things are shaping up. Good luck.
Just a quick note. I would appreciate any other views. It appears as though we may break out above yesterday's high. I will be long on a trade above 12195 with my usual very close stop. Be prepared for a short trade on a trade to the 12216 - 12250 area. Best regards
I exited my 3 YEN longs today this morning. They hit my profit target. Total profit of about 290 pips on the trade. Exit point is .8736 for all 3 contracts. I really wanna leave one out there to see how far it would go, but I prefer to close out before the weekend, and I should not be greedy. Regards, Steve
Steve: Great trade my friend. Congrats on the call and the execution. Very nice profit indeed. I am not long as yet on the Euro. Didn't stay above the high long enough to be convincing to me. Again, key levels are yesterday's high and low. Good luck BLR
Thanks, USD/JPY is flirting with the very long term upward trend line at 115.80. It broke down below that line for an instant this morning. I expect at least a minor retracement before it breaks down. I will be looking to leg into a EURO long posiiton at a retracement from recent highs. I agree with the bullish outlook in the euro now, and my technicals are turning up. Regards, Steve
The Fed and others are now of the view that the top in interest rates may be 5%. This is a significant change from last week when I was hearing of rate increases well in excess of this number. It is certainly bearish for the dollar. We are also hearing that Euro rates are likely to be increased. When you need to borrow 8 bn a day to break even, and the deficit is 7% of GDP, at some point the market is going to notice. I think we are seeing that now. However, it appears as though a correction in in the cards from our most recent high for the Euro (we seem to nearing the low of yesterday) which may last for the next couple of days. I will be looking to go long with a larger load than usual when we start to move higher again. The 12300+ is the first significant target. Current Order of Important Resistance Points after a correction is complete: 1 12240 2 12270 3 12325 Good luck to everyone.
I am shutting down for today and will do review of where we stand on the weekend with a view to being ready for a new trade on Sunday. If we do so see any further upside today and we may, I think it will be fairly limited. In any event my next trade is likely to be short and then, a long position on the resumption of the uptrend. As indicated in my previous post, the upside should be limited to 12216 to 12250. I don't expect to see the later figure and the former is not far enough above the market to present a good risk/reward trade for me. I will post the COT/Funds position when I have it. I look forward to other divergent opinions. Best regards
BLR, Your opinion reflects mine almost exactly. I think it is too risky to place a long at these levels. Sunday might be a good time for a short to catch some of the re-tracement before the big move up. Although that short will need to be watched like a hawk using tight stops. Fundamentally, the dollar should be sold. We have a war/deficit/stall in housing/ trade gap/ Oil sold in EURO's soon. Technically, just go with the flow. My bias says to be short the dollar, but I will have to see what the charts say. Regards Steve
Hello Everyone: I havenât looked at the Euro since Friday except to note the closing price which was at about 12184. As expected, there was very little upside action before the close and not enough of a risk/ward in either direction to warrant a trade. This is my two cents worth on where we stand now. Please jump all over me if you have a differing view. Always glad to hear other opinions. The COT numbers are interesting and although there is no large scale exit of long term dollar positions there is a definite change. As of March 14, the open interest has dropped with the Funds decreasing their positions and the small specs went long. Reason enough to go short. All of the large traders, the Funds and the Commercials went net short. Not in a large way but, short. The dollar chart on a WEEKLY basis shows the next support level at the 86.50 level or thereabouts which should be reached by the middle of May. I think there is now some real weakness showing in the dollar in the intermediate term and, all trades should be oriented to the long side vs. the dollar. The interest rate differential that has held it up so long is about to evaporate. 5% may be the top for the FED and if that turns out to be the case, we are in for a slide in the dollar that is likely to very sharp. I ran across and article by Victoria Marklew, an analyst with Northern Trust, a European Bank. It reads as follows: Across continental Europe, policy interest rates are headed upward, and maybe a little faster than the markets currently expect. Today's 25bp rate hikes from the Norwegian and the Swiss central banks were widely anticipated, not because of current levels of inflation but because of expectations that stronger domestic economies will boost price pressures further down the road. As in the Euro-zone and in Sweden, the central banks are taking steps to return to "normal" interest rate levels before things get out of hand. Which brings us to the ECB. Euro-zone inflation eased a tad in February, to 2.3%, Since the 25bp rate hike on March 2, we've seen a steady drum beat of statements from Governing Council members that, in addition to high oil prices, money and credit growth pose a risk to price stability. On Tuesday, Governor Trichet made his usual references to "abundant liquidity" and the bank's "accommodating" monetary policy. The markets have been assuming that the next upward move will come on June 8, but there is a possibility of a move on May 4. If Trichet starts using the word "vigilant" in his speeches next month, then the possibility will become a probability. It seems that regardless of whether rates are raised on May 4 or not, rates are going up and this will mean a rise in the Euro. It is not going bode well for US capital inflows either. Steve summoned up the hurtles facing the dollar in a concise sentence in his most recent post. My weekly goal in the Euro is the same as I have posted before: 1.2509 â 12653. I see no reason to change this target area and now believe we may reach to the 12653 level before we are done here. However in the near term we are in for a correction. The maximum upside risk to a newly initiated short position is to the 12216 level. I canât see us getting much above this. (Watch it go to 12325 hehe) If that is the case, my strategy on Sunday is to short the Euro at or near the closing levels seen in Fridayâs session and place a stop just above 12216. I may have to sell it several times before my stop holds but, it is my view that we are headed lower here and I think it will be well worth the effort. We will have a clearer downside target when the market turns lower, however it may retrace somewhere between the 38% and 50% level of the run up from the March 10th low at 1.1856. Therefore, we can wait for this correction to be over to take a long position for the next move higher or, short on Sunday night at or near current levels. That will be what I will be considering and will post my trades as I enter. Please let me know if you agree or disagree. Best regards everyone. (I promise my posts will be shorter in the future)
Not short yet. Action in London this morning didn't offer much insight. I was waiting for a spike higher. We may briefly hit the 12216 resistance level. Couple of days of down to come. Currently have a sell stop just below Friday's low just in case. Looking for a higher level to go short. Anyone have any opinions?