My EURUSD and other things

[anon58863749]

But I am trying to move on and catch some more longer term type exposure, but we can only take what the market has to offer - and that is something we all should respect in our trading.

Hi @anon46773462 . Hope you would be fine. Nice thread you have started.

I remembered that, in one of my post, you mentioned that you only trade EU. But it is good to see that you have started trading Euro crosses as well. And you have also provided the reason why you are doing so.

I was Long (@ 1.52126) in EURCAD since 3rd September but yesterday’s I was abruptly out from it by hitting my sl at 1.5300 after the news of BOC’s Wilkins remarks.

The same situation happened with GBPUSD day before yesterday, when a fake news was released by Blomberg regarding UK and Germany agreement.

What is your opinion on these two instances where most of the traders would have booked huge losses?

Were they planned with malafide intention to achieve certain motives or they were misunderstood by the market participants?

[anon46773462]

What is your opinion on these two instances where most of the traders would have booked huge losses?

Were they planned with malafide intention to achieve certain motives or they were misunderstood by the market participants?

Hi @anon58863749!
To be honest, I think both of these were just typical reactions to unexpected news by a vast sea of speculative traders. There are always various conspiracy theories about the causes and timings of sudden market movements and possible manipulations by powerful persons/institutions etc but I am not really convinced about that at all. I think the only organisations that can seriously influence market moves in global foreign exchange are the central banks/governments and they are not doing it for personal gain by any means (whether info is leaked beforehand to “interested parties” is another issue, but that is a very serious offence!)

In fact, these particular movements were actually pretty tame compared with what these markets are capable of. There is a lot less volatility nowadays than some decades ago! We have seen that the markets are largely moved in the short term by speculative interests because that is the only reason why markets go quiet on, for example, US holidays. We have to accept that markets are driven by greed and by a huge volume of seriously big money. And when that all happens to suddenly point in the same direction, well, we know what happens! On one hand, we all want to have free, unregulated, demand/supply-driven markets but then we also have to accept that the downside is that it will also be potentially extremely volatile! But I do not see any devious plots behind these. But then maybe I am just very naive!

I remembered that, in one of my post, you mentioned that you only trade EU. But it is good to see that you have started trading Euro crosses as well.

Well, I am beginning to think this was actually a mistake!!! Yes, I have only really traded EU, and for decades. And yes I am looking to move into more currency pairs and on a longer term basis - and it is really not easy to make that transition after having been a short term trader for so long - at least, not for me! But I am now beginning to realise that expanding my interests to just Euro pairs is actually restrictive rather than liberating!!!

So I am going to have to think where do I want to go with this. I like the idea of focusing on the Eurozone and Europe in general, but I don’t want to force my trading to fit into a Euro strait-jacket just because that is the theme for this thread! For example, I have (had) the same view on AUDCHF as other traders here and I have been short on that, in and out, twice today, as well as short on EURUSD.

I am actually thinking of turning this thread into an “anything about anything” topic and just posting about whatever is catching my attention! But that is not really very useful - except maybe to me!

[anon46773462]

For example, I have (had) the same view on AUDCHF as other traders here and I have been short on that, in and out, twice today, as well as short on EURUSD.

Actually, I am thinking of taking my profits on the EU already, It is such a subdued downmove after the NFP that it wouldn’t surprise me to see us drift back up and end the week back on the 4H SMA 200 - and do you want to know why?----it is all down to that fiendish crocodile @Dennis3450 and his SW thread!!! He has so many followers and shows so often how that 200SMA holds the market that the whole world is either homing in on the 4H SMA or heading towards the 1H 200SMA (only jesting!)- great guy, great thread - if you haven’t found it yet, find it!!!

[peterma]

Eur/Gbp closing the week below it’s open, Eur/Jpy likewise.

There is a fundamental reason for Eur/Gbp rising in the last week of the month, spoken of that before, there was some speculation that the first week of the new month might be different re Brexit, but then the news returned all to normal.

Buy Eur/Gbp last week of the month, sell it first week of the next month is the normal.

Bills have to be paid (for now at least).

The Eur/Gbp monthly FA thing is in this thread around the middle I think.

Trading The News

What the results of accumulation look like on a chart: Always watch out if a Euro seller around month end. Btw see the divergence on zero lag macd [image]

[anon46773462]

Thanks for that @Peterma!

That provides a very interesting example of how a fundamentally driven general direction in a currency pair can be crystallized into a precisely defined series of price levels by the process of TA and automated trading.

I think traders rarely pause to think why Support/Resistance lines appear and what forces maintain them (or not). Often, levels become important purely because they gain notoriety and widespread recognition, such as the 200 period SMA, such that even when there is not any current fundamental reason for that particular level to be significant it still causes a reaction.

Where there is no real cause underlying price movement then reaction to such levels can be short-lived, technically driven and of limited follow-through.

[anon58863749]

Sorry for the late reply. Actually, today, I was so busy in my business activities so I couldn’t spare time to respond.

To be honest, I think both of these were just typical reactions to unexpected news by a vast sea of speculative traders. There are always various conspiracy theories about the causes and timings of sudden market movements and possible manipulations by powerful persons/institutions etc but I am not really convinced about that at all.

But I do not see any devious plots behind these.

I respect your views - but …

if you haven’t found it yet, find it!!!

Thanks for your suggestion about Dannis thread. But, I use my own method for SW Currency analysis.

[anon46773462]

Thanks for your suggestion about Dannis thread. But, I use my own method for SW Currency analysis.

Yes i have seen your thread and your own method. I do follow your posts.

That psrticular last post of mine was just a general, open comment on a lacklustre response to NFP at the end of a rather lacklustre week! Sorry for any confusion there

[anon58863749]

Hi @anon46773462

I am posting a link in anticipation that it would be informative and relevant to your thread.

https://tradingeconomics.com/euro-area/indicators

Edited: Please explore the website, you would find very helpful tools and information on Global Economics including Indicators, Forecast etc on Currency, Stock, Bonds and Commodities as well.

[anon46773462]

am posting a link in anticipation that it would be informative and relevant to your thread.

Hi @anon58863749!
That’s a great link, thanks!
There’s some great info there about the Euro area and in a neat and concise presentation.

I have bookmarked it for future reference. Thanks again!

[anon46773462]

This was probably the last warm weekend of the summer up here in the North. The weather promised to be lightly cloudy and sunny. It was the perfect occasion to drive to our country hideaway. Sometimes it seems there is no better combination for sorting out one’s thoughts than to be in the heart of nature doing some heavy manual work. I have wanted to think some more about what I want to do with this thread and this seemed the ideal opportunity…

This has been an exceptionally hot and dry summer and the level of the water at our lake has dropped by a record amount of nearly a metre. But this has presented the dubious benefit of being able to dig out some rocks at the shore for a new mooring for a small rowing boat - this was the heavy manual labour bit!

So I return with bruised ankles and an aching back, worn out but content, and with some more concrete aims for this thread.

I have two broad areas that I want to focus on.

One is to promote interest, awareness, knowledge and enthusiasm for the European area in general (for me as well as for anyone else interested! ) .

The other is to follow the fortunes of the single currency, the Euro, against the other major global currencies. And it is here that I have previously had some lack of clarity about how to do this with a longer term perspective without getting bogged down into a kind of _“trades/commentaries for the day”!_scenario. (Although I will inevitably still highlight some specific trades whenever there is something of interest happening).

So instead of reinventing the wheel, I thought I’d start with a kind of “heatmap/SW” presentation, such as found on many threads here and other internet sites, but based on my own charts. This is not some new mathematical construction based on exotic, mysterious formulas, it is purely based on a visual assessment of my charts.

I have also repackaged the charts that I want to use for this purpose for greater clarity. But these are not trading charts, they simply illustrate issues. I am a great believer in the greater power of vision over words

What I am looking at is the Daily v 4-hour charts and I am looking for some kind of confluence in the landscape architecture presented in these for each of the major pairs. In other words, I am looking to identify longer term trends on a daily basis and then determine which 4H charts are currently in synch with those trends.

This is how it looks as at last Friday’s close:

Here are three different situations apparent:

1. same colours show pairs where the daily and 4H are synchronised, either with weak Euro (reds) or strong Euro (greens). At present, there are such three pairs: CHF, NZD and AUD. However these three pairs have been in their current trends for some time already and I would be a little cautious about entering new positions now…

2. Opposing colours show pairs where (usually) the Daily is still in one direction but the 4-Hour has crossed into the opposite. The EURCAD is like that now and here is the situation visually:

Here, the daily chart (left side) is still positive, incl RSI, but under its 200 SMA. But the 4H (right side) is now negative, incl RSI, but above its 200SMA. This suggests to me that this pair is indecisive and not trending. It may well offer short term trades but I would not choose this pair right now for a longer term trade.

3. Orange combined with Red or Green. These are the pairs that I put on my “Watch List”. They are not quite “there” yet but the potential is. There are currently three pairs in this category: USD YEN and GBP. For the time being I exclude the GBP because of the increasing tensions and drama, and looming deadlines with the Brexit negotiations. This is a unique situation in the European area and no one knows what will be the outcome or how it is going to affect economic and financial issues. It is prone to sudden big moves and high volatility based on rumours and statements as much as any concrete events. This is not an environment for long term trends.

But both USD and JPY are currently in this category. They are both negative on the 4-Hour and the Daily has turned flat, even trading below key MA levels. But the Dailys are not yet negative and so the shorter term negativity could easily be short-lived - which is typical in a broad consolidation phase.

But these “Orange” cases are potentially at the start of the next big trends, and that is why I have them on the “Watch list”

Here is the EURJPY as an example:

The Friday close (Left side, red vertical) showed an upmove that has stalled, but not yet turned down. The RSI was neutral but the MAs were still in the “right” order. But we were under the 200SMA, the price closed under the MA “belt”, and there are a series of lower highs. The 4-Hour, by now, was already now negative, and, after a bit of juggling around the 4H 200SMA, has this morning remained under it. I guess this has to be my favourite right now and I will be watching how this closes tonight on the Daily…

BUT!!! A word of warning! This entire setup is a prototype, borne over last weekend whilst doing hard labour shifting rock piles. There are no recommendations here. This is purely my personal attempt to try to focus on the bigger picture of where the Euro is viv à vis the other majors. Of course, I will be taking my own trades within this, but I am making no recommendations to others here!

[anon58863749]

Excellent work and analysis Manxx.

[anon46773462]

Excellent work and analysis Manxx.

Thankyou…but the proof of the pudding is…well, in this case, in the green pips.

Its been an interesting day so far and I’m intrigued how its going to look at the close tonight!

Michael Barnier, the EU Brexit negotiator has said in Slovenia today that it is realistic to expect a divorce deal with Britain in 6-8 weeks. That is good news for both GBP and the Euro…

[anon46773462]

Spotlight on: The European Union and its flag

The European Union is a relatively young structure with its roots in the immediate post 2nd World War efforts to avoid such destruction ever happening again in Europe.

The first step was the formation of the _European Coal and Steel Community (ECSC),_created in 1951 by the Treaty of Paris. Its purpose was to jointly control things needed to prepare for war, i.e. steel for weapons and coal for factories. This treaty was signed by France, Italy, Belgium, Netherlands Luxembourg and West Germany, who are the founder members of the European movement that eventually became the European Union.

The next major step was the signing of the Treaty of Rome in 1957 by the same six countries and which established the European Economic Community (EEC). The main idea was to create a ‘common market’ by abolishing all national obstacles to free trade, such as border checks, delays and customs duties, as if Europe were one country.

The ECSC and the EEC, together with a third major European community, the European Atomic Energy Community (EAEC), were collecively called the European Communities (EC).

The European Union finally came into being with the signing of the Maastricht Treaty in 1993.

Today, the EU comprises the 28 countries as shown in the table below together with the dates they joined and their participation in the Shengen agreement and the Euro currency zone.

Today, more than 700 million people live in Europe: 500 million of them in the European Union.

Some of the most important stages in the EU history include:

• On 9 November 1989, the Berlin Wall was pulled down and East and West Germany were reunified as a single Germany in October 1990.

• In 1995 the Schengen treaty came into force that would allow people to travel without having their passports checked at the borders within the countries committed to the agreement. This agreement now covers 22 EU countries and a few non-EU countries.

• There had long been various plans to create a single currency within Europe, and that dream was partially realised with the introduction of the Euro in 2002. The Euro is now used in 19 EU countries.

The European flag

The European Flag is the official symbol of the European Union (EU). It consists of a circle of twelve five-pointed gold stars on a blue field.

The flag was originally designed in 1955 and was accepted as a symbol for the whole of Europe. It was later adopted by the EEC in 1985 and then naturally became the flag of the EU itself when it was later formed in1993.

On the EU official site, the flag is described as:

” The European flag symbolises both the European Union and, more broadly, the identity and unity of Europe. It features a circle of 12 gold stars on a blue background. They stand for the ideals of unity, solidarity and harmony among the peoples of Europe. The number of stars has nothing to do with the number of member countries, though the circle is a symbol of unity.”

[anon46773462]

I decided yesterday to rearrange and keep the colour chart in geographic blocks with each pair always in the same place instead of some kind of ranking. This makes it easier (at least for me) to follow the changes as they evolve in each pair and to also give a picture of the changes in the general geographic regions (although I am not sure what value that has!):

Some interesting changes in positions yesterday. The GBP was generally positive, presumably due to the early comments from Michael Barnier. But the big changes on the day were:

1. EURCHF: The Euro had a very good day here and completely reversed the 4H chart, and thus terminating the current downtrend position to neutral. (I.e awaiting a new signal from the 4H before resuming - or a change in the Daily). I did mention yesterday that this was already an extended, mature move and that one should be wary about entering any new short positions here.

2. EURNZD and EURAUD both saw some positive gains in their positions, about 80 and 40 pips respectively. These are still in “trending” mode (although, again, very mature moves now).

3. EURGBP: This was one on my watchlist and yesterday it turned into a downwards “trending” mode with both timeframes red. I have taken a very small token short here just to be with the “system” but this is a very volatile pair at present and there is still a long way to go with the Brexit negotiations. Even if the UK govt and EU do reach agreement within 6-8 weeks, it still has to be approved in the UK parliament - no easy matter. But lets see how this moves in the coming days (hours? ). I don’t really expect to see a win on this but it is small and I have to have something to worry about!

Here is the chart. Note that the Daily is still above its own 200SMA and that is my initial target area for now:

Both the other “watchlist” pairs, EURUSD and EURJPY proved the value of caution and not pre-empting moves as neither saw any confirmation on the Daily and in fact moved in the opposite direction. Sometimes a no-trade is a win if it avoids a loss.

I also decided yesterday to keep a table of the trades that enter the trending mode and their eventual outcome. I am including the three current trades from yesterday (CHF;NZD;AUD) as well as the new EURGBP today. I will post that later…

[anon46773462]

@anon46773462

I also decided yesterday to keep a table of the trades that enter the trending mode and their eventual outcome. I am including the three current trades from yesterday (CHF;NZD;AUD) as well as the new EURGBP today. I will post that later…

This is how I will be keeping track of how these trend analyses work out.

This is very artificial at the moment because it includes current open trends which started before I made this table. So there may have been some other positions that both came and went during that same time that are not included here.

It is also more optimistic than what I’d expect to normally see here over time because it starts with 2 exceptionally long and continuous moves against NZD and AUD. I wouldn’t typically anticipate these types of moves on a 4H type charting basis. But this will develop over time.

The EURGBP is the first new trend candidate to open (which is ironic since this is the one pair that I least trust due to its susceptibility to sporadic Brexit issues and statements!)

Section 1 = opening data
Section 2= max gain in price and pips
Section 3= max drawdown in price and pips
Section 4= closing data

The EURCHF is the only closed trend here (yesterday).

[anon46773462]

Although I am not a member of Nial Fuller’s site nor wish to be seen as promoting him, there is a lot of wisdom and many good points in this article of his about the benefits of trading end-of-day charts compared with day trading.

Since this is the transition that I am trying to achieve here, I thought it relevant:

http://www.learntotradethemarket.com/forex-articles/why-im-not-a-day-trader

[anon46773462]

Yesterday was a quiet day generally with a few changes:

Both NZD and AUD pairs put in slightly higher highs

EURGBP managed 22 pips from entry but then slipped back to the starting block (no great surprise there!). IT is still technically in a downtrend trend but I am really not expecting this to go anywhere soon with the current polarity of views on a Brexit deal/no-deal.

EURJPY has a good close yesterday and flicked the “TrendWatcher” into a green/green mode, i.e. this is now the second new position. But I get the feeling we are seeing the MAs running round the price rather than any significant directional price action here. Asia took it down again but it is still in
trend mode so far. (see below)

EURCAD is now on the watchlist for a down move, but the daily is still neutral.

The EURJPY is quite a mover intraday but is not really showing any signs of breaking into a trend yet. The objective is to spot trends starting but this chart does not suggest that is what we are seeing here even though the overall picture is slightly on the upside. I am not buying this yet:

The charts are in positive mode but the price movement is flat to negative. The RSI’s are neutral. We are still seeing lower highs on the 4H chart - tand the price is not even holding above yesterday’s Daily Pivot level. But let’s see what the day brings…

[anon46773462]

Country Spotlight – Hungary

Hungary is a country that we have all heard of but I wonder how many of us could actually draw it on a blank map of Europe? Hungary is a landlocked country with a population of around 10 million and bordering with no less than seven other countries. It is also divided in two by one of the major rivers in Europe, the Danube:

One of the most valuable cultural assets of the European area must surely be its long, varied and rich history. Each country has its own story and Hungary has one of the most facinating tales to tell.

It has been conquered and divided and shared out many times in its history. It was part of the Roman empire in the early centuries (CE) before being taken over by the Asiatic Avers in the 6th century and then the Franks in the 8th Century. It was then conquered by the Magyars originating from the Urals in modern Russia.

In later years they were involved in sweeping invasions by the Ottoman Turks, and later by the Hapsburgs from Austria. Hungary was divided into three parts, including Transylvania. This Austro-Hungarian region continued a difficult and violent relationship until, in 1867, Austria and Hungary became separate states linked by a shared monarchy.

Because of its ties with Austria, Hungary was involved in both World Wars with Germany. After the 2nd World War Hungary was forcefully taken over by the Communists. However, popular discontent soon began to grow and eventually boiled over leading to demonstrations and violence in the streets. This culminated in the so-called Hungarian Uprising in 1956 which ended in Russia attacking Budapest and other cities. After a few days they had crushed the uprising.

But as the Soviet Union started to crumble in the late 1980’s the Hungarian Communist Party renamed itself the Hungarian Socialist Party and changed its policies. Other political parties were formed and the constitution was finally amended to allow an orderly transition to democracy and capitalism.

Hungary joined the EU in 2004 and the Schengen area in 2007. Whilst historically it was primarily an agricultural land, today’s Hungary is a typical post-industrial economy with an employment structure of 63% in the service sector, 30% in industry , and about 7% agriculture.

Hungary is currently once again embroiled in a new wave of conflict and confrontation within the EU, this time concerning its policies towards the recent immigration problems affecting all countries in the EU area.

The Hungarian currency is currently the Forint, which replaced the pengő in 1946 at the end of what turned out to be the worst case of hyperinflation ever. This is how it is described in Wikipedia:

“Between the end of 1945 and July 1946, Hungary went through the worst inflation ever recorded. In 1944, the highest denomination was 1,000 pengő. By the end of 1945, it was 10,000,000 pengő. The highest denomination in mid-1946 was 100,000,000,000,000,000,000 (1020) pengő. A special currency, the adópengő – or tax pengő – was created for tax and postal payments. The value of the adópengő was adjusted each day, by radio announcement. On 1 January 1946 one adópengő equaled one pengő. By late July, one adópengő equaled 2,000,000,000,000,000,000,000 or 2×1021 (2 sextillion) pengő. When the pengő was replaced in August 1946 by the forint, the total value of all Hungarian banknotes in circulation amounted to 1/1,000 of one US dollar. This is the most severe known incident of inflation recorded, peaking at 1.3 × 1016 percent per month (prices double every 15 hours). The overall impact of hyperinflation: On 18 August 1946, 400,000,000,000,000,000,000,000,000,000 or 4×1029 (four hundred quadrilliard on the long scale used in Hungary; four hundred octillion on short scale) pengő became 1 forint.”

[anon46773462]

Seems like trends have gone out of fashion for the time being! Many pairs seem to be just rolling between the 4H and 1H 200-period SMA’s

The EURUSD is one of them. In this chart the blue dashed line is the 1H and the black dashed is the 4H. See how many times it has traded around these recently!

But a short term trader can also benefit from these even when there is no trend to stick with. We just broke out through the upside and there was a quick 20+ pips up to the 1.1650 whole number…and it only requires checking in on the hour:

[anon46773462]

Although it is only Thursday, I have to say this has been an exceptionally consolidative week so far across all the Euro pairs. It has been dominated by flat ranges, technical trading off 200-period SMA on 4H and 1H timeframes, and even a pause in the three main long-term trends: CHF, NZD and AUD.

The only two potential new moves this week saw no follow-through (yet) and I even closed out my EURGBP for a mere 13 pips from sheer boredom! The EURUSD is the latest to show a potential move starting on the upside, but that has been more stagnant recently than any other pairs, so it doesn’t really get the adrenaline pumping for me yet!

It has been a week of talking about trends but trading dips and peaks. At least for me, the 4H/1H combination is far more important and productive right now…

Here are our 7 pairs so far this week:

EURUSD

EURCAD

EURGBP

EURCHF

EURJPY

EURNZD

EURAUD