Time To Get Down To It

Discussion in 'Forex' started by Exchanges, Mar 26, 2006.

  1. Well, guys, here it is, opening bell in the forex - Sunday 5PM ET - Japan just opened.

    All kidding/ribbing aside, anyone have any outlooks for the week?

    Bush, oil, Iraq civil war, Iran nuclear war, major news announcements??


    <img src=http://elitetrader.com/vb/attachment.php?s=&postid=1020633>
  2. I am long EUR/USD, Long AUD/USD, Short USD/CHF

    The Iraq civil war is starting to become a major concern. Nothing good can come out this country. I am a little cautious this week/month.

  3. Wait for the Fed tomorrow night and then just follow the interest rate futures, tick for tick!
  4. Lon, if you're not, you should be one of the most repected members on ET if not in all of tradingdom.

    You've always earned my respect.

    I hope you never side with the local punks against me.

    Anyway... getting back onto topic...

    Interest rates. I've been trying to convince myself that the world would not be so stupid as to actually trade around a single massive force such as interest rates.

    You know, there's always other things to consider when trading the whole picture.

    Even as Kastro pointed out, the Iraq civil war is exploding. Is (or should be) of major concern.

    But lately this interest rate issue has been coming around more and more.

    Seems like everywhere one looks, there it is again.

    So let me clarify this...

    Are you actually saying that the globe is so hung on interest rates that the market may continue moving singularly around this one factor above all else?

    Thanks ahead of time for your reply, Lon Eagle! :)

    Kindest regards,

  5. I am saying that, for the time being at least.

    The Fed have put rates up from 1% to 4.50% and now no one knows where the peak of rates for the US is. The best guess is somewhere between 4.75 and 5%.

    Meanwhile the ECB have started hiking rates but have stressed theyare not following the Fed model of small hikes very meeting until they stop. They have leaked that they think their neutral rate is 3.50% though.

    As a result the market, rightly or wrongly, is fixated on the interest rate differenential in the short term. The best example I can give is last hursday some second tier housing numbers in the US were stronger than expected and the euro doll fell a big figure in minutes. Then the next day another second tier release contradicted this number and the euro rallied 70 odd pips very quickly.

    Every little clue about the interest rate differntial is being super analysed at the moment. To me that is why the meeting tomorrow is so important.
  6. You know, everything you say is true.

    "The best example I can give is last thursday some second tier housing numbers in the US were stronger than expected and the euro doll fell a big figure in minutes."

    Yes, I remember that. I scalped and position-traded several successful shorts on that tumble. Fact, there's still been downward pressure - I've got a EUR/USD short open now that is teetering into profit.

    Regarding the interest rates - I've seen some dumb moves in the market but for the focus to be so on interest rates at the moment is bordering on OCD - someone(s) is gonna turn up HUGE losses.

    And I suspect they'll be churned out by institutionals - results being seen toward the final quarters of this year.

    I'm on the other side completely of the interest rate traders. Been tough going lately but I've been managing the drawdowns OK.

    I've traversed rougher waters.

  7. Why would you be long EUR/USD and short USD/CHF? The two are like 99% correlated...
  8. Technicals for USD/CHF looked perfect...Enter ( 91 pips + )

    Later on...Technicals for EUR/USD looked good...Enter ( 14 pips + )

    Besides an interest play, I leave the correlation out of my decision to enter these two.

  9. Coinzy

    If you dont think the interest differential is the key - look at the reaction to the IFO and M3 this morning - no other reason for Euro rally.
  10. OfmY


    Agree with you, Lon Eagle. :)
    #10     Mar 28, 2006