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Risk aversion weakens and jitters seem to have resided somewhat for the euro as comments out of Germany reassure the markets that the debt relief package is on its way. Hard-line comments from German officials early into the week sent the markets into a panic, but as I already mentioned in the above post, these comments were mostly posturing by German politicians and not serious attempts to block any debt relief, though much damage has been done along the way. The German Bankers Association renewed their warnings of contagion effect on the other less-than-perfect euro zone countries if quick action is not taken on Greece. This was one example of renewed urgency in German comments over the last 24-hours, highlighting the
Continue reading–>EUR/USD Wrap Up for April 29
I just want to start by having a quick look at the ‘strength meter’ of yesterday and comparing it with today. Yesterday it clearly shows the market in ‘safe haven’ buying mode, the Dollar and the Yen were the master currencies. With this type of pattern we certainly wouldn’t be looking to sell USD or JPY so our probability of winning has just increased. As a purely technical trader I am less worried with the why, and more concerned with being aware of what’s happening and acting upon it.
Today we can see them both weakening a little. Notice that the Yen leads the way, it is much more volatile than the
Continue reading–>FOREX DAWN| EUR/JPY & GBP/USD Breakouts
A nice classic breakout trade this morning during the London session. All day yesterday and overnight cable has been ranging (blue zone), and it was just a matter of patients to see if it wanted to continue in that mode or push lower. In my opinion it was unlikely to push higher as that 1.55 ceiling has kept things in check since the end of February. This recent downward move with such high momentum could be the start of a further push southwards, worth keeping an eye on anyway.
Price broke support then gave us a nice little pullback on the 5min chart to allow an entry with a 30pip SL. First
Continue reading–>FOREX DAWN| Sterling Breakout
Fundamental data out of the U.S. and Euro zone paint a very murky picture as of today, as concerns over financial regulation in the U.S. is put on center stage today with Goldman Sach’s CEOs testifying before congress in the U.S., while Greek unions declare they will strike May 5 against austerity, Germany continues to stall finalizing the aid package, and 10 year bonds spreads are up to a full 4 points today (U.S. 10 year bonds trade at 1/64th of a point for comparison).
EUR/USD continues to rally and then fade as more news from Germany weighed down the recent rally attempts. A German coalition member recommends a Greek debt restructuring in order to get aid. Not a crazy idea
Continue reading–>EUR/USD Wrap Up April 27th
Hi, nice to be back after a break doing other things. Two trades today, this first one with the EUR/JPY pair was quite satisfying as I very nearly didn’t take it due to the 30pip stop, and psychologically first day back had it gone against me it would have been a bit of a blow. Happily the strong momentum carried through the support level and I was able to cash in 1 lot for 30pips quite quickly. The second lot was closed at the 50pip target level. This for me was a counter trend play so I was happy enough to get out at that point. 80pips in total for this
Continue reading–>FOREX DAWN| Back to Trading with 2 Trades
EUR/USD made it’s way once more back below 1.3300 as the Greek tragedy continues and new data paints a bleak picture for the euro zone. Moody’s Investors Service once again downgraded Greece’s government bond ratings to A3 from A2 and stated that a further possible downgrade might be coming upon further review. Hardly a major surprise there, but it did help send the euro much lower today. As I’ve mentioned before in previous posts, the bonds market is something to keep an eye on when evaluating the strength/weakness of the Greek situation and it’s impact on the currency market. Today Greek 5-year CDS rose to a record 616 bps after
Continue reading–>EUR/USD Wrap Up April 22
Here’s a few examples of how I used trendlines and moving averages to enter and exit some recent trades.
We spent Friday and Monday in a risk off mode as worries about the Goldman Sachs SEC charges took over and sent the bulls running for cover. While we’ve seen some moderate bounces during the European sessions on Monday and Tuesday, and strong data out regarding the better than expected ZEW data (German April economic sentiment coming in at 53.0 from 44.5 in March, above median forecast of 45.1), short-covering appears to be the main thing at play in the markets with positioning all wrong after NY basically ignored Goldman Sachs woes for reasons I’ll speculate on later in this post.
Today Goldman Sachs’ reported first quarter profits of $3.5 billion which also helped cushion the inevitable fall from grace that
Continue reading–>EUR/USD Bears Back in Business
EUR/USD worked its’ way ever so slowly higher during the Asian session to 1.3666 as a ‘risk on’ move developed after reports from Singapore about tightening monetary policy by effectively revaluing the Sing Dollar around 1.4%. Talk of massive stops above 1.3700 combined with Moodys comments that Greece’s chance of a rating cut is now greater than 50% also played a role in bringing a halt to the modest rally. Moody also followed those comments up with Greek default risk as a low probability event. That said the Greek stock market is down another 4% today and thus a rally looks to be out of the picture for today. One
Continue reading–>EUR/USD Wrap Up for April 14
A major development happened over the weekend that should have a boosting effect on the euro beyond what we’ve already seen. Bloomberg reported on Sunday that: European governments offered debt- burdened Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates as they try to end its fiscal crisis and restore confidence in the euro. But Greece says they will need a further 50 bln in the years ahead in addition to the EUR 30 bln offered up yesterday by the EU and IMF. The effect of this news produced one of the biggest gaps I ever seen in price action over the weekend. EUR/USD closed in NY on Friday at 1.3490 but
Continue reading–>EUR/USD Wrap Up for April 12
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