EUR/USD Long?

[lcontempi]

Originally Posted by peterhubble

Does anybody think there will be a retracement at Fibonacci level 1.618? Or do you think USD will continue its helpless downfall after breaking 2.618?

Well, MACD + RSI seems to show the market have been overbuying EUR so, even though USD has to fall long term due to fundamentals, it sounds that there may be some opportunities to go short at some time today about EURUSD.
Note all the uncertainties in my sentence

[justlearning]

Yeah...Icontempi

the power behind the bulls seems to be slowing, also some other analyst are calling for a stop to the up trend...there seems to be alot of sideways movement today

[JimmyMac]

A lot will depend on how fraught things get in Euroland compared to the economic woes in the States & more importantly, exactly how the Central Bank & Treasury depts manage the show.

If the ECB resist (or temporarily hang fire) the need to drop rates, that will mean the Euro will pay decent swap interest (currently +2.25%) for holding ‘long’ positions v/s the buck. In the current climate that’s a real juicy fruit to tempt players with. Of course, that’s not the only marker which tips the balance one way or the other, but it’s a big positive nonetheless.

Traders are a very fickle lot. If they feel the Eurozone is better placed to ride out the economic storms more favorably than the U.S then it won’t take much to inspire them to lump on in favor of Euro.

Confidence & trust are of major importance when betting in financial markets. It won’t take much to garner support for a particular currency if players see (early) signs of stability & substance, particularly if the Central Bankers are vocal in their intentions.

It’s a case of keeping a real keen eye on the intra-week developments out there & timing your technical signals to fall in step with the fundamental flavors unfolding day on day.

The smart operators will be utilizing both elements in tandem to offer them a tighter edge in these ever volatile markets. At the moment, since Euro busted out of the holding base down at c1.2850 the value ticket is tentatively buying dips.

Bear in mind we’re approaching a very illiquid period in the calendar & funds that haven’t already stripped & re-balanced their books will be paring off & adopting a more near-term view.
This often manifests itself via over extended, erratic & sharp price moves in either direction as lower than average position sizing influences market operations far easier than in normal trading conditions.

[T-rex]

Hey I am interested on trading the correlation between EURUSD, USDCHF. Though I am interested on hearing your thoughts about what you think on volatility of these pairs ending the year. Would be wiser to wait until next year?

[JimmyMac]

Well, I touched on it at the end of that last post.
Activity (liquidity) is traditionally weaker at this time of year as funds & large players square up their books & re-allocate/assess funding tranches into the year end.

If they’re underweight/overweight a particular sector or need to repatriate funds for specific reasons & they choose to execute their game plan during low liquidity traffic, you’ll experience spikey or exaggerated price moves until the strategy is fully implemented.

It doesn’t take much to move some of these instruments when volumes are small & activity is quiet. Just be mindful of those instances & the possible effects on your specific strategy play(s) before you place your bets at this time of the year.

Things usually start returning to normal after the end of the 1st week of January when most of the key players return from the holidays.

[TechMan]

Hey Jimmy!
EURGBP is in a race to parity... How you think would affect EURUSD?
Crazy isn't it?

[JimmyMac]

How you doin TechMan

Yeah, Euro is sure tearing up the track huh?
Not really surprising if you consider that nothing much has changed out there of late to alter the directional flow of money into the single currency. And unless traders get a sniff of anything untoward, they’ll continue to pump money thru the pipes of currencies that offer an attractive return v/s it’s competitors.

It always has been, & will continue to be, all about value!!

It’s still the same old theme/story: credit crunch woes & interest rate dominance (which attracts funds for short & medium term investment portfolios etc).

Sterling is in the hole for a variety of reasons, so it will continue to struggle against it’s close European neighbor. If you look at the widening gap between the Dollar & Euro interest rates + the manner in which the differing economies are handling the global downturn then you’ll see why Euro is on a kickback path v/s the buck.

Technically, the recent move up this month off that floor of support has run out of steam at a previous zone of s&r up yonder at 1.4720. That weekly s&r marker at 1.3650 represents the halfway level of the months low to high move.

Judging by the orderly behavior of the pullback off 1.4720 they're in no hurry to run it back down. Looks like normal profit taking & partial paring off consistent with low volume (holiday) traffic to me.

We'll get to see the true color of the money soon enough as the holiday lethargy shakes loose in early January. I'd imagine 3650 will harbor a few buyers should prices get pushed a little lower from here. Talk of large buy stops to & beyond the recent highs certainly won't disappoint Euro Bulls.

It continues to offer decent value as a “buy on dips” for now.
Whether it holds that ace card remains to be seen, but I guess if you get a signal (set up trigger) to load up here abouts then it’s worth a tasty punt, especially if you’re already long from a little ways back.

[AngyTrix]

Euro strength and dollar weakness is caused by the ECBs lack of anticipation for further easing and negative data in US economy.
Big channel between 1,4275 and 1,3877

[tradeinvest]

I don’t like the way it’s moving…Actually it’s not moving at all

[AngyTrix]

I thought we were in a trend correction. I was expecting for the price to climb towards 1,5000 but it has formed a channel between 1,4257 and 1,3877
Any advice?