[QUOTE=“GlobalMacro;679816”] Alright. Greek elections came in about as expected… Political figures seem to have softened there tone and hopefully will be making some compromises going forward… As I alluded to last week with this post, I was thinking euro stages a rally this week and I’m still thinking that. At this point, the main bearish events are past us and with the currency being so over sold, it seems likely it will want to stage a rally… Maybe 200 pips or so. Unless something changes, I’ll be buying eurusd this week where I can.[/QUOTE] Well I was right about the rally… About 200 pips as I said. Unfortunately I was only able to catch a fraction of the move.
At 1600 pips below the 200 day moving average, a days-long rally in the EUR/USD would not surprise me.
Me neither. The EUR came back a bit at the end of the day.
I did say a small correction but still in a down trend , It depends on the system that you trade with
[QUOTE=“MAFAHMY;679965”] I did say a small correction but still in a down trend , It depends on the system that you trade with[/QUOTE]
Yep!
Next up on the fundamental watch today is the Aussie CPI… This is a big event as it’s the last piece of of major data the RBA will see before their rate decision next month… A low number will stoke expectations of a rate cut and nearly every indication is for a release that will come in below expectations… That being the case I’m thinking Aussie will spike down on the release.
I’ll prefer shorting audjpy rather then audusd as I’m thinking usd may see some selling going into the FOMC and equities may sell off due to anemic earnings being released today which would imply a stronger yen.
Well the Aussie CPI won’t force the RBA into a rate cut. The Aussie is responding accordingly by jumping…
Alright… RBA rate decision is due today and it will assuredly cause quite a bit of volatility. Lots of talk has been made regarding a potential rate cut with quite a few big names forecasting one, though the majority of economists see rates staying on hold. Although I think a rate cut is entirely possible, I don’t think they will do it. The benefits will not outweigh the costs at this point (lower inflation is due to lower oil prices, something a rate cut will have little impact on, yet cutting rates will add fuel to an overheating housing market). I think the likely scenario is that Stevens uses the statement to open up the possibility for rate cuts in the near future but will refrain from taking action today. I believe this will see the Aussie move up as the extreme bearish levels we are at now are built upon a rate cut occurring today.
I will have a buy entry set for about 25 pips above whatever spot is a minute before the statement is released.
Global Macro must be taking a break 
This week has been carnage in many markets. The two things that seem to be the cause of the stress are China’s apparent economic slowdown, and uncertainty over the Feds rate path. The VIX has seen its largest ever weekly percentage increase, oil is declining and should continue to be pressured… So where are the best trades?
Well in an environment of risk off sentiment, falling oil, and falling global growth prospects…one needs to look no further than shorting the Canadian dollar. The Canadian dollar has already fallen a significant amount over the last year in a response to the bank of Canada cutting its rates and oil falling. This theme is strengthening and I am confident that we will see usdcad hit 1.3320 with further gained likely if we see market stress continue.
Welcome back Global
[QUOTE=“peterma;718324”]Welcome back Global :)[/QUOTE] gracias sir.
There are two things of interest that occurred over the weekend.
First is the Euro Zone, this may have been missed on Friday:
Eurozone business activity rises in August - RT� News
And then this over the weekend:
[QUOTE=“peterma;718448”]There are two things of interest that occurred over the weekend. First is the Euro Zone, this may have been missed on Friday: Eurozone business activity rises in August - RT[/QUOTE] right. Euros steady rise over last last few sessions is indicating to me that we are seeing flows into the currency that aren’t speculative. A reasonable theory would be that as the euro equities have sold off, these positions are causing an inflow into euros as most of these positions have been hedged for euro downside. Meaning the equity being closed also closes out a euro short. Could be wrong, but this makes sense to me.
The implication is that this is not a train you want to try to step in front of. Structural flows do not react off levels that speculators find significant, as they aren’t speculative in nature themselves. The flip side to this is that once the spigot turns off, the move can reverse quickly. I’m not touching eurusd until it is past 1.1600.
Reviving this thread!! I hope Global Macro don’t mind