The EURUSD has proven quite resilient and despite Friday’s strong NFP report it did not correct as many forex traders may have expected. I think anywhere above 1.3900 is a good time to take profits and enter short positions as I believe we may be in for a 200 pips+ correction before we end up tackling the 1.4000 mark especially if the ECB stays out of it.
Friday, I think, was more about the USD than the Euro.
The market seems to be in two minds regarding the US economy outlook.
My own belief is that in the next 6 months we will see an increase in numbers. I’m basing this on new orders, bus confidence, serv pmi, non mfctr pmi, ind production, small bus optism … etc etc.
I drew a silly line under the daily usdx back on Mar 18 at 79.25, that line has continued up to 79.35, question is breakout or rebound.
I detest fence sitting… I’ll go with false breakdown, then rebound.
[QUOTE=“peterma;625549”]Friday, I think, was more about the USD than the Euro.
The market seems to be in two minds regarding the US economy outlook.
My own belief is that in the next 6 months we will see an increase in numbers. I’m basing this on new orders, bus confidence, serv pmi, non mfctr pmi, ind production, small bus optism … etc etc.
I drew a silly line under the daily usdx back on Mar 18 at 79.25, that line has continued up to 79.35, question is breakout or rebound.
I detest fence sitting… I’ll go with false breakdown, then rebound.
<img src=“301 Moved Permanently”/>[/QUOTE]
Fridays move was entirely usd driven… Pull up the dollar index and you’ll get the clear picture.
The reason for it is simple.
There are two HUGE cross border acquisition deals in the works with two big US companies looking to acquire two European companies, with the total transaction amount over $100 billion US dollars. These companies used the liquidity and the strong USD response to the NFP to hedge into the currency they need for the transactions at a good price (which means they needed to dump massive amounts of USD). The resulting sell off of the usd after NFP wasn’t a speculative move, it was a capital flow moved caused by large transactions running through the market that were not designed to make money, but rather complete a purchase.
Oh, some traders were head scratching about the rebound on Fri, was it possible for a Fibre trader who went short to have anticipated his profits would evaporate within hours?
Yep… Gold traders were ahead by 14.15 gmt, USD traders then panicked out.
Yeah, there’s been a lot of talk about those M&A’s, sometimes hard to distinguish the talk from the reality.
I’m still bearing a lurking bull feeling re the USD, conversely, GBP is even more bullish - I suppose what makes this game so interesting.
Good to see you Lexi.
[QUOTE=“peterma;625556”]
Good to see you Lexi.[/QUOTE]
Likewise 