EUR Fundamentals

The Fed was decided for a interest rake hike in early 2015. Now it looks like they are thinking it could happen in late 2015. Anyway, US economy seems to be getting stronger than in the last months. Meanwhile ECB has plans (they started already) for QE to try to reactivate the economy and to push up inflation, which is too low.

It looks to me that in the medium term (weeks to months) the sensible option is to short EUR/USD. The current bounce up that we are seeing now in the pair could be a corrective movement (many people cashing profits).

I cashed a nice 800pips move shorting the pair but at the moment I’m out waiting for a clarification on what is going to happen. It looks like all the economies are slowing down (NZD, AUD, JPY, China, EUR… GBP not clear…) but for the US.

Thoughts on this?

Just in case you have some EUR pairs open (or you would like to open one), here is Draghi’s speech from yesterday:

Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament

Use those fundamentals and benefit from them!

EUR will go up before it falls, don’t take shorts too early, everyone is expecitng euro short, which is a bad sign.

Fundamental data out of the Eurozone points to a weaker Euro, especially if the FED moves ahead with a rate hike.

yes, that is true, EURUSD fundamentally should go down, today Draghi confirmed this move by strongly supporting the QE in Eurozone.

There is little change in the last FOMC minutes: states that member should watch out inflation number
disinflation become main theme recently and I believe THE FED could delay their first rate hikes
still, my bias on EURUSD is bearish
go short after some pullback

Now the ball is on Draghi said, market is discounting serious QE from ECB, if Draghi dissapoints these expectations EUR can bounce back to the previous levels.

EUR bond yield drop to record low
Is It sign that bond market has priced Mario Draghi’s more aggressive QE?
We know the answer…

yes, but Euro has been rebounding for 2 days. We have to wait a few more pips up to take shorts.

The end of the month…
we should be more careful
(though the fundamental is very clear for this pair)
usually investor rebalanace their portfolio before the year’s end
in my trading career, I never trade in mid December till mid january

EURUSD has been down very steeply and there is support in position, this might make it more on a negative trend.

Hi orni3008,

I am not sure if EURUSD short is still the best trade out there. EUR data are coming out positive lately and USD seems to be overbought to me.

Good luck,
FE

Mr Draghi talked about the Eurozone’s economy again so it is good to keep it in mind what he said:

Mario Draghi: Stability and prosperity in Monetary Union

Another speech from Draghi:

Mario Draghi: ECB press conference - introductory statement

Good day fellows,

I have a question: I read (at grabthefx) that the CHF may fall due to this new tax evasion agreement, and that that maybe would cause also the EUR to go up; what’s the fundamental explanation on this opinion? I was thinking that CHF would fall because many people evading taxes in Switzerland won’t do it no more, so that’s why they might not be demanding as much CHFs as previous the agreement. And the Euro might go up because it’s no longer attractive for a EU citizen to take their money to Switzerland. What do you think? would that happen immediately, taking in count that the agreement is set for 2018? I would say yes… as people would take their money to other places starting now… But I also know that this isn’t the only agreement about tax evasion that has being sign.
Sorry to bother :S

As Mr. Draghi decided to talk again, here is his speech:

Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament

New drops of wisdom from Mr. Draghi:

Mario Draghi: Atlantic Council Remarks

Mr. Draghi has mixed up the markets once more, before the new year. Make sure to read the following article:

Mario Draghi: ECB press conference - introductory statement

Mr. Draghi shared again some fundamental thoughts with the public:

Mario Draghi: Participation of the President in the Portuguese Council of State

Funny thing about our economies. Euro and US, we have to rely on the Banks to bail us out of problems that never end. And the fed to tell the banks how much money they need to bail us out. Tells you something about our system of capitalism. It doesn’t work! If it does work, it works for all the wrong reasons. Maybe good for us FX’ers! at least there is some volatility to work with. Even though our economies are shot to , he-L!