Tag Archives: euro

Who Was Short the Euro?

By Biiwii

Buy the news! Euro sports a Draghi

Who was short the Euro on Draghi Day?  For that matter, who was long Uncle Buck?  I mean I am long plenty of Uncle Bucks because I have a high cash position.  But who was trying to game the ECB?

Come on, admit it boyz and girlz.

euro 5 min. chart

We had noted the wedge (or ending diagonal, as EW’s might say?) on USD in an NFTRH update yesterday.  Here’s the daily UUP equivalent.  Uncle Buck is in a bull market, though a correction was likely because this is the market that wants to put all robotic, automatic thinkers off sides occasionally just to keep things interesting.

uup daily chart

Did USD Just Bottom?

By Elliott Wave International

Did USD Just Bottom? Did EUR Just Top?

Find out free — now, during Forex FreeWeek at elliottwave.com

Late last week — and then again on Monday — EURUSD, the world’s most traded forex pair, fell sharply. In fact, the euro lost almost 200 pips, or two cents, against the buck.

Here’s a chart of that decline, copied from our Currency Pro Service (partial Elliott wave labels shown):

EURUSD chart, forex

Our Currency Pro Service editor, Jim Martens, just posted a new video for FreeWeek participants where he explained why he’s bullish on the USD. So this reversal certainly fits the “big picture.”

Continue reading Did USD Just Bottom?

Euro Short & Long-Term

By Biiwii

The Euro is gaining the bid as short covering pushes it higher.  Today it is popping through resistance and will try to make that a support level.

euro daily

The target is 120, which would likely be a good opportunity to short it or potentially long Europe again.

euro monthly

We’ll see.  It’s a macro market where letting things play out rather than knee jerking to conclusions is likely to work best until we get a read on the nature of this.

Anti-USD & Euro QE ‘Me Too!’ Trades Updated

By Biiwii

Hey, I know I always seem to need to give these things nicknames (Armageddon ’08, Fiscal Cliff Kabuki Dance, etc.).  Maybe that is a reflection of how non-seriously I take modern finance on a fundamental level.  What we have here are policy and media driven hysterias, both to the positive side and the negative, swaying an emotional collection of players to and fro.  It is more of a game than a science or well heeled, buttoned down profession.

So currently, on an interim basis we are working the ‘Anti-USD inflation trade’ (a bounce in inflation expectations and associated ‘hard’ assets) and the Euro QE ‘Me Too!’ trade, with its template being the US QE that has worked to hyper boost (stock) asset prices.

It appears that the mealy mouthed Fed, still refusing to bail out any savers that are left (both of them), has kicked another leg out from under the US dollar, which had for some reason been discounting a Fed that would begin raising the Funds Rate by now like a normal entity in a normal post-crash bailout environment would have done upon achievement of its objectives.

‘But no, we just need to tweak a few more positive data points out of it or wait until we see the white’s of inflation’s eyes’ implies the Fed.  Whatever, the dollar is down this morning and the anti-USD inflation trade should get a bounce in its step, in line with one of our main themes.  If the May low is violated, Uncle Buck could take a pretty deep correction.

Continue reading Anti-USD & Euro QE ‘Me Too!’ Trades Updated

Around the Web

By Biiwii

It’s been a while since we went around the intertubes for some market analysis…

  • US Industrial Production Drops Again in May  –Floating Path
  • World is Facing its Longest Oil Glut in at Least 3 Decades  –Bloomberg  [biiwii comment: ha ha ha… one random bloomberg headline from may 2008 with wti crude at $122: goldman’s murti says oil ‘likely’ to reach $150-$200… “Crude oil may rise to between $150 and $200 a barrel within two years as growth in supply fails to keep pace with increased demand…” crude topped a couple months later at 147]
  • Mortgage Rates at 35 Week High but Purchase Applications Picking Up  –GaveKal  [biiwii comment: a rush to ‘get in’ before the big bond bear (interest rate rise)? but this is the public we are talking about (the same public that was convinced about $200 oil).  that could be bullish for bonds (bearish for interest rates) after our target of 3.6% to 3.7% on the 30 year is registered on the ‘continuum’, though there’s a 1st time for everything, so we’ll avoid overly rigid thinking…]
  • Euro Zone Stocks Hit Air Pocket  –Dr. Ed  [biiwii comment: yes, and right on schedule doc. see bullet #1 above]

 

EURUSD; Not Random

By Elliott Wave International

EURUSD: Why Recent Ups and Downs Are NOT Random

How Elliott wave analysis can bring some certainty into the oh-so-uncertain world of forex trading

How do you know what “your” forex market will do tomorrow?

You don’t. We don’t. Nobody does. All anyone can do is guess. But some guesses are more “educated” than others.

In a recent interview, Elliott Wave International’s Senior Currency Strategist, Jim Martens, explained why for the past almost 30 years his favorite method to “guess” at the market’s trend has been Elliott wave analysis:

Jim Martens“Markets are doing what they are supposed to be doing: inflicting the most pain on the most number of people. Markets fool the most number of people at the most unexpected moments, but by tracking Elliott wave patterns, sentiment (and the news) you can prepare yourself.

“What separates Elliott wave fans from the rest of the public is that the public has no basis for determining when the trend may be over.”

Let’s take a look at a recent example: namely, price action in EURUSD on April 5-7.

Since the mid-March low in EURUSD, Jim and his Currency Pro Service team have been tracking a “messy” Elliott wave pattern in the euro-dollar: a correction. “Messy,” because corrections are just that: choppy, overlapping, often directionless moments when it’s just plain hard to make heads or tails.

Yet, under Elliott wave analysis, even corrections have rules and guidelines. There are 13 known corrective Elliott wave price patterns, and if you nail what part — and of which pattern — you find yourself in right now, you can make a strong case about where the market will go tomorrow.

Case in point — on Sunday, April 5, Jim Martens posted this bullish euro-dollar forecast in his Currency Pro Service:

Continue reading EURUSD; Not Random

Around the Web

By Biiwii

Market News and Analysis From Around the Intertubes

 

USD/EUR Implications

By Biiwii

Our pals at NFTRH.com noted the move in USD/EUR, with the FOMC acting as an accelerant to already likely short-term events.  We, I mean they :-) also babbled a bit about the gold miners.

But the following chart of hedged Europe fund HEDJ and three unhedged Euro items shows why I got rid of the way over crowded ‘currency hedged Europe’ trade.  If a Euro bounce and USD drop were likely, that hedge no longer made sense.

Note HEDJ negative while EZU pops.

I currently hold the last two items in the panels below per ongoing analysis about European exporters (a big pharma and a diversified industrial/manufacturer).  So far so good.  Not sure yet if I am going to take these profits.  I have to run, but need to think about the markets tonight (and I am sure NFTRH will have an update in the morning).

hedj

Europe Fights Lower Prices

By Biiwii

The European inflation rate is “calculated using the weighted average of the Harmonised Index of Consumer Price [HICP] aggregates” according to TradingEconomics.com.  That is a fancy way of saying the things people pay for, including the things they need on a daily basis.

Here is the dreaded deflation (of consumer prices) that Europe is fighting.  Like the US before it, Europe is operating on a plan that would boost prices (i.e. the effects of inflation) higher so that people participating in the financialized economy can benefit from rising equities (as we first projected in Q4 2014) and the regular people can, well… get screwed (USA style).

euro.inflation

Welcome to the European ‘me too’ QE play!

Yesterday the Euro boinked our target of 105 [1.04935] and all seems to be going according to plan.

euro

But the play (dollar bull, euro bear) is getting extreme now.  Extremes can persist but they are what they are, defined as “reaching a high or the highest degree; very great”.

Let’s just assume the extremes have not yet reached the highest degree.  That does not mean the risk vs. reward to a stance in line with current trends is not extreme.  It is.  Time is the thing.  Trend followers who momo mature trends and go on autopilot always get burned sooner or later.