Welcome to EurAnalysis
Yes I know it sounds like urinalysis but in a way the purpose of this thread is to do more or less the same thing. The only difference is that instead of urine, we are analyzing the Euro against its most major counterpart; the US Dollar.
I invite all participants to contribute what they know about the EUR/USD as well as any other Euro related currency pairs.
Before I get started with submitting my first post, I want to lay down the ground rules of this thread. I only have a few rules but they will be strictly enforced.
1. During market hours, please keep the discussions strictly on issues directly related to trading the Euro and any other instrument which influences (or is influenced by) the Euro. This can be technical analysis of charts and indicators, Fundamental analysis of political and economic factors which directly or indirectly affect the Euro, or any other information you wish to exchange with others that you feel will be of help in determining general market sentiment or providing trade ideas. During off-market hours, you are free to engage in any discussion that you feel the other thread participants would find of interest. Just keep it clean please
2. If you are going to make a bold statement and represent it as fact, please back it up with authoritative references. This could be a chart for a trade call or technical analysis, or a link to a reputable news source for fundamental analysis.
3. Vulgarity, personal attacks, name calling or bullying of any kind for any reason will not be tolerated here. Neither will any posts claiming that the poster's trading methods are the only ones that work, and everybody else's is crap. Generally the only acceptable posts are the ones that offer value to other posters and I will determine whether any such posts meet that criteria at my sole discretion. Obviously healthy and clean debate is always welcome and encouraged. Furthermore, any poster who ignores any instructions given by the thread starter & moderator (that's me), will be immediately blocked without notice or explanation. This is done in order to allow me to maintain focus on my trades and other posters. If I have found reason to issue a fair warning to you, it means you have already gone too far so it is time for you to listen up and take notice.
4. In the interest of privacy and security for everyone who posts here, divulging your capital balance, profits or losses in any live trading account is very strongly discouraged. I cannot prevent you from doing it but it is not wise of you to do so on any public forums. If you want to tell other traders your profits and losses booked to balance, you may use aggregate pips based on the 4 decimal place system, or you may express it as a percentage of your capital. The same applies to floating profits and losses... pips or percentage of capital. Obviously this rule does not apply if you are trading in a demo account as long as you make that fact clear to others while posting your numbers.
Please note that failure to adhere to the rules of this thread by any member or visitor will result in a warning the first time and a possible suspension (at my sole discretion) on a repeat offence.
That's it for now but I reserve the right to add more rules as I see fit. If you have any ideas to share about some rules that will keep this thread clean and resourceful for others, please feel free to submit them.
Peace
=================================== =================================== ==================
SOME POSTING GUIDELINES:
(Added 23 October 2011)
I have noticed that at certain times, there was some discussion about certain posts made by certain members wherein text from linked articles was copied and pasted in line with the post. More specifically, the comments were more directed at these members making several such posts in succession and thereby "spamming" the thread.
While I agree that any such successive posts seem somewhat abusive, I cannot agree that they do not meet the requirements or that they violate any current rules or guidelines in this thread.
However, I would like to point out that in the interest of fairness to all, I would prefer to see less successive long postings from any one individual. If you feel a need to make a long post, please allow some time after your post for others to post their views before making another long post. The alternative would be to keep your posts short, or if you have much to say on a variety of topics, then please include them all in one post.
I must stress that these are guidelines and not rules.
I want to encourage everyone to post their views as they see fit and if an external article or news item describes it better than they can, I see no harm in quoting excerpts from any such external links.
One more thing though, which I believe I have made clear in the past and is also a rule.
During peak market hours, especially from Europe open to US close, I would like to see all philosophical, speculative and historical discussions kept to a minimum as this is the time for fundamental/technical analysis and trade calls.
=================================== =================================== ==================
DISCLAIMER:
Any trade or analysis related comments made in this thread by myself or any other person should not be interpreted as anything other than a point of view by the respective poster. It is your responsibility as a trader to decide what information to use and what to disregard and you do so at your own risk.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all traders or investors. Before deciding to trade the foreign exchange (Forex) markets, you should carefully consider your objectives, financial situation, needs and level of experience. The possibility exists that you could sustain a loss of some or all of your funds and therefore, you should not speculate with capital that you cannot afford to lose.
=================================== =================================== ==================
FF EMAIL SETTINGS:
(Added 12 October 2011)
Here are some instructions regarding emails you receive from this thread.
Once you post to this thread, depending on your current profile settings regarding email notification, you may start receiving an email for every post that is made on here after yours.
In order to change those option, you have to perform the following steps.
1. Go to your profile and click on the subscriptions link in the left hand column. That will give you a list of all the threads and news items you have posted in.
2. Put a check mark in the far right column of the ones you want to change.
3. At the bottom of the list you will find a pull-down menu. There you will find the subscription action options. Just select the option you want.
4. Click GO
You're done.
=================================== =================================== ==================
THINGS THAT MAKE YOU GO HMMM:
Hmmm Mar 25 2012.pdf
Hmmm Apr 01 2012.pdf
Hmmm Apr 09 2012.pdf
=================================== =================================== ==================
RESOURCES:
(Added 14 October 2011)
This is a new section which will list a variety of resources for new and seasoned traders alike. I will organize it and build on it as I see fit but welcome suggestions any time.
EDUCATIONAL:
1. Baby Pips School
2. Raghee Horner's 'Best of the daily trading edge" e-book
3. Chart School from stockcharts.com
4. Explains by cnbc.com
5. John Murphy's Ten Laws of Technical Trading
6. Forex trading systems collection revealed!
7. Martin J. Pring’s 19 Trading Rules to Beat the Markets
8. Trading the Forex with Bonds - - -
MARKET CHARTS:
1. Futures from Finviz.com
2. Major Currency Pairs from finviz.com
MARKET NEWS:
1. Yahoo Finance Currency News
2. RTT News Earnings Calendar
3. Forex Factory Events Calendar
ANALYSTS:
1. Marc Chandler @ SeekingAlpha
2. John Mauldin @ JohnMauldin.com - Frontline Thoughts
FF THREADS OF INTEREST:
1. Twelve widely believed forex myths
2. Trading with Deadly Accuracy
OTHER LINKS:
1. World Clocks
2. The Federal Reserve Bank of New York foreign exchange swap agreement web page
3. The latest 10 Year Government bond yields
4. The Swede's primer on options.
RISK ON / RISK OFF:
1. Overview of Risk On/Off
2. Following Example
3. Risk On, Risk Off and the Gold Trade
4. Risk On/Off and Global Currency Flows
5. Overview of Carry Trade
6. Baby Pip's Carry Trade Criteria and Risk
7. The Carry Trade: Get With It Or Get Run Over By It
8.
PRECIOUS METALS:
1. USA Gold
RECENT ARTICLES OF INTEREST:
1. The Fed resumes printing (February 2012)
=================================== =================================== ==================
SEARCH FOR KEYWORDS:
If you would like to search this thread for a particular post you previously saw that is of interest to you, you don't need to go through all the pages looking for it. The folks at Forex Factory have provided us with a good keyword search tool which you will find just above the first post on every page as a small box called "Search This Thread". Just type in your keyword and search. Try it, it's easy.
=================================== =================================== ==================
EU Crisis (Key Dates):
--Tuesday, April 10: Greek T-bill auction.
--Wednesday, April 11: Italian T-bill auction. Settlement of foreign-law Greek bonds under PSI.
--Thursday, April 12: Italian bond (BTP) auction.
--Tuesday, April 17: Spanish, Greek T-bill auctions. German April ZEW economic-sentiment indicator.
--Wednesday, April 18: Extended deadline for some Greek foreign-law bond holdouts to tender their bonds.
--Thursday, April 19: Spanish, French bond auctions. Meeting of Group of 20 deputy finance ministers (through April 22).
--Friday, April 20: German April Ifo business-climate index. Annual spring meeting of the International Monetary Fund/World Bank (through April 22).
--Sunday, April 22: French presidential election, first round.
--Tuesday, April 24: Spanish T-bill auction.
--Wednesday, April 25: Allotment of ECB three-month long-term refinancing operation.
--Thursday, April 26: Italian T-bill auction.
--Friday, April 27: Italian bond (BTP) auction.
--Monday, April 30: Euro-area March M3/private-sector loan data. Euro-area April inflation data.
--Wednesday, May 2: Euro-zone April manufacturing PMI data.
--Thursday, May 3: Spanish, French bond auctions. ECB rate decision and press conference in Barcelona.
--Friday, May 4: Euro-zone April services PMI data.
--Sunday, May 6: Possible second round of French presidential election. Possible Greek elections (April 29 and May 13 also likely dates).
--Monday, May 7: German March manufacturing-orders data.
--Tuesday, May 8: German March industrial-production data. Greek T-bill auction (tentative).
--Friday, May 11: Italian T-bill auction.
--Monday, May 14: Spanish, Italian bond auctions. Euro-zone finance ministers' meeting.
--Tuesday, May 15: Euro-zone flash 1Q GDP data. German May ZEW economic-sentiment indicator. EU finance ministers' meeting. Greek T-bill auction (tentative). EUR450 million Greek foreign law bond matures.
--Wednesday, May 16: French bond auction.
--Thursday, May 17: Spanish bond auction.
--Monday, May 21: Belgian bond auction.
--Tuesday, May 22: Spanish T-bill auction.
--Thursday, May 24: German April Ifo business-climate index.
--Monday, May 28: Italian bond auction (zero coupon/linker).
--Tuesday, May 29: Italian T-bill auction.
--Wednesday, May 30: Italian bond auction (BTP). Euro-area April M3/private-sector loan data. Allotment of ECB three-month long-term refinancing operation.
--Thursday, May 31: Euro-area May inflation data. Ireland holds referendum on EU fiscal pact.
http://www.nytimes.com/interactive/2...ro-crisis.html
=================================== =================================== ==================
Links to Italian bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
Links to Spanish bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
Links to Greek bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
The latest 10 Year Government bond yields
=================================== =================================== ==================
YOU MUST READ THIS:
Don't get trapped in a marriage you cannot handle.
Always use sound money management techniques.
It will save your account and your emotional well being.
I've been trading forex for almost 10 years now. Back then it was a completely different market. If you had a 100 pip move in the EUR in a day, you were lucky. Things were much calmer and the retail forex market was smaller with much less liquidity and volume. Therefore, fundamental analysis and general market sentiment was more important than technical analysis. However, it didn't really take much effort to be a position trader. All you had to do was buy euros on every dip and let them all ride for as long as the fundies and sentiment pointed upwards. The only indicators I used back then were fibonacci tools, a 10ema and a 144ema.
Then came 2008 and everything changed. The markets became more irrational, less predictable and more challenging to stay in the game without more in-depth technical analysis. But that only applies to intraday trading.
From a position trader's perspective looking at the very long term, if you look at the monthly Euro chart, I see the formation of a bull flag on its way to completing wave 5 downwards. My target based on this view is around the 1.12 handle which makes it a 61.8% retrace of the 2000 lows at 0.8225 to the 2008 highs at 1.6019.
Obviously these moves do not happen in a straight line so let's take a closer look at this same monthly chart. Right now I see that we are sitting on a falling trend line offering relatively medium support at around the 1.35 area (Where we are now). The monthly candle for September has significantly pierced this line, rebounded, and is now challenging it again.
From a purely technical perspective, assuming this area offers major support, the move further down is not likely to happen until the October candle and from this candle's lows at 1.3383 we should expect a rebound of approx 200 to 300 pips upwards to approx 1.3585 to 1.3685 (If we look at smaller time frames we would be able to more closely narrow down the targets but for the purpose of this post we will stick to the monthly perspective only).
The above mentioned 200 to 300 pip estimate is based on the monthly rebounds of similar long term trend line penetrations. More specifically the 2008 downward penetration of the long term rising trend line and the similar 2010 downward penetration of the newer long term rising trend line. (Refer to chart)
Now, without getting into too many specifics, let's add some of the current fundamentals and general market sentiments to the picture. I will provide some reference to some news articles which back up my following statements but I am not going to get too in depth here as it would take far too much space. This is just one post and not an entire thread. LOL
1. The situation in Europe is all doom and gloom and the politicians do not seem to be doing much about it. Every day more and more economists are calling for a Greek default. Politicians who were opposed to a default are now admitting that a default becomes more and more possible each day. They do not want a default because they do not know what the outcome would be and how much damage it would inflict on the economy. However, they are now starting to realize that kicking the can down the road just causes more uncertainty in the markets and in corporate & consumer confidence. This is not good for the global economy. Therefore, default or no default, the outlook is negative.
http://www.forexcrunch.com/greek-def...r-6-countries/
http://www.bloomberg.com/news/2011-0...om-europe.html
2. The growth forecasts have once again been adjusted downwards. The ECB will eventually have no choice but to reverse its rate increase of 0.5% earlier this year. This move will probably come at the next ECB council meeting and be reflected in the October rate statement. The only question is if it will be 0.25% or the full 0.5%.
http://www.reuters.com/article/2011/...78M03Z20110923
I think I've said enough for now. I suggest you keep your eyes on the news section and perhaps tune in to CNBC and/or Bloomberg to get a better sense on what is going on out there. You don't need an economics degree to figure it out. The writing is on the wall and the technicals support the fundamentals as well as the general sentiment.
In conclusion, we should all realize that nobody can predict what is going to happen. We can only make our next trade decision based on the best information available to us. The best chance of a trade being successful depends on how all three analysis methods line up with each other. Confluence of everything, just like when all your technical indicators point to a specific direction. If you ignore the fundamentals, you're not doing a compete analysis and your chances of loss increase.
Happy trading and good green profitable pips to all
Yes I know it sounds like urinalysis but in a way the purpose of this thread is to do more or less the same thing. The only difference is that instead of urine, we are analyzing the Euro against its most major counterpart; the US Dollar.
I invite all participants to contribute what they know about the EUR/USD as well as any other Euro related currency pairs.
Before I get started with submitting my first post, I want to lay down the ground rules of this thread. I only have a few rules but they will be strictly enforced.
1. During market hours, please keep the discussions strictly on issues directly related to trading the Euro and any other instrument which influences (or is influenced by) the Euro. This can be technical analysis of charts and indicators, Fundamental analysis of political and economic factors which directly or indirectly affect the Euro, or any other information you wish to exchange with others that you feel will be of help in determining general market sentiment or providing trade ideas. During off-market hours, you are free to engage in any discussion that you feel the other thread participants would find of interest. Just keep it clean please
2. If you are going to make a bold statement and represent it as fact, please back it up with authoritative references. This could be a chart for a trade call or technical analysis, or a link to a reputable news source for fundamental analysis.
3. Vulgarity, personal attacks, name calling or bullying of any kind for any reason will not be tolerated here. Neither will any posts claiming that the poster's trading methods are the only ones that work, and everybody else's is crap. Generally the only acceptable posts are the ones that offer value to other posters and I will determine whether any such posts meet that criteria at my sole discretion. Obviously healthy and clean debate is always welcome and encouraged. Furthermore, any poster who ignores any instructions given by the thread starter & moderator (that's me), will be immediately blocked without notice or explanation. This is done in order to allow me to maintain focus on my trades and other posters. If I have found reason to issue a fair warning to you, it means you have already gone too far so it is time for you to listen up and take notice.
4. In the interest of privacy and security for everyone who posts here, divulging your capital balance, profits or losses in any live trading account is very strongly discouraged. I cannot prevent you from doing it but it is not wise of you to do so on any public forums. If you want to tell other traders your profits and losses booked to balance, you may use aggregate pips based on the 4 decimal place system, or you may express it as a percentage of your capital. The same applies to floating profits and losses... pips or percentage of capital. Obviously this rule does not apply if you are trading in a demo account as long as you make that fact clear to others while posting your numbers.
Please note that failure to adhere to the rules of this thread by any member or visitor will result in a warning the first time and a possible suspension (at my sole discretion) on a repeat offence.
That's it for now but I reserve the right to add more rules as I see fit. If you have any ideas to share about some rules that will keep this thread clean and resourceful for others, please feel free to submit them.
Peace
=================================== =================================== ==================
SOME POSTING GUIDELINES:
(Added 23 October 2011)
I have noticed that at certain times, there was some discussion about certain posts made by certain members wherein text from linked articles was copied and pasted in line with the post. More specifically, the comments were more directed at these members making several such posts in succession and thereby "spamming" the thread.
While I agree that any such successive posts seem somewhat abusive, I cannot agree that they do not meet the requirements or that they violate any current rules or guidelines in this thread.
However, I would like to point out that in the interest of fairness to all, I would prefer to see less successive long postings from any one individual. If you feel a need to make a long post, please allow some time after your post for others to post their views before making another long post. The alternative would be to keep your posts short, or if you have much to say on a variety of topics, then please include them all in one post.
I must stress that these are guidelines and not rules.
I want to encourage everyone to post their views as they see fit and if an external article or news item describes it better than they can, I see no harm in quoting excerpts from any such external links.
One more thing though, which I believe I have made clear in the past and is also a rule.
During peak market hours, especially from Europe open to US close, I would like to see all philosophical, speculative and historical discussions kept to a minimum as this is the time for fundamental/technical analysis and trade calls.
=================================== =================================== ==================
DISCLAIMER:
Any trade or analysis related comments made in this thread by myself or any other person should not be interpreted as anything other than a point of view by the respective poster. It is your responsibility as a trader to decide what information to use and what to disregard and you do so at your own risk.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all traders or investors. Before deciding to trade the foreign exchange (Forex) markets, you should carefully consider your objectives, financial situation, needs and level of experience. The possibility exists that you could sustain a loss of some or all of your funds and therefore, you should not speculate with capital that you cannot afford to lose.
=================================== =================================== ==================
FF EMAIL SETTINGS:
(Added 12 October 2011)
Here are some instructions regarding emails you receive from this thread.
Once you post to this thread, depending on your current profile settings regarding email notification, you may start receiving an email for every post that is made on here after yours.
In order to change those option, you have to perform the following steps.
1. Go to your profile and click on the subscriptions link in the left hand column. That will give you a list of all the threads and news items you have posted in.
2. Put a check mark in the far right column of the ones you want to change.
3. At the bottom of the list you will find a pull-down menu. There you will find the subscription action options. Just select the option you want.
4. Click GO
You're done.
=================================== =================================== ==================
THINGS THAT MAKE YOU GO HMMM:
Hmmm Mar 25 2012.pdf
Hmmm Apr 01 2012.pdf
Hmmm Apr 09 2012.pdf
=================================== =================================== ==================
RESOURCES:
(Added 14 October 2011)
This is a new section which will list a variety of resources for new and seasoned traders alike. I will organize it and build on it as I see fit but welcome suggestions any time.
EDUCATIONAL:
1. Baby Pips School
2. Raghee Horner's 'Best of the daily trading edge" e-book
3. Chart School from stockcharts.com
4. Explains by cnbc.com
5. John Murphy's Ten Laws of Technical Trading
6. Forex trading systems collection revealed!
7. Martin J. Pring’s 19 Trading Rules to Beat the Markets
8. Trading the Forex with Bonds - - -
MARKET CHARTS:
1. Futures from Finviz.com
2. Major Currency Pairs from finviz.com
MARKET NEWS:
1. Yahoo Finance Currency News
2. RTT News Earnings Calendar
3. Forex Factory Events Calendar
ANALYSTS:
1. Marc Chandler @ SeekingAlpha
2. John Mauldin @ JohnMauldin.com - Frontline Thoughts
FF THREADS OF INTEREST:
1. Twelve widely believed forex myths
2. Trading with Deadly Accuracy
OTHER LINKS:
1. World Clocks
2. The Federal Reserve Bank of New York foreign exchange swap agreement web page
3. The latest 10 Year Government bond yields
4. The Swede's primer on options.
RISK ON / RISK OFF:
1. Overview of Risk On/Off
2. Following Example
3. Risk On, Risk Off and the Gold Trade
4. Risk On/Off and Global Currency Flows
5. Overview of Carry Trade
6. Baby Pip's Carry Trade Criteria and Risk
7. The Carry Trade: Get With It Or Get Run Over By It
8.
PRECIOUS METALS:
1. USA Gold
RECENT ARTICLES OF INTEREST:
1. The Fed resumes printing (February 2012)
=================================== =================================== ==================
SEARCH FOR KEYWORDS:
If you would like to search this thread for a particular post you previously saw that is of interest to you, you don't need to go through all the pages looking for it. The folks at Forex Factory have provided us with a good keyword search tool which you will find just above the first post on every page as a small box called "Search This Thread". Just type in your keyword and search. Try it, it's easy.
=================================== =================================== ==================
EU Crisis (Key Dates):
--Tuesday, April 10: Greek T-bill auction.
--Wednesday, April 11: Italian T-bill auction. Settlement of foreign-law Greek bonds under PSI.
--Thursday, April 12: Italian bond (BTP) auction.
--Tuesday, April 17: Spanish, Greek T-bill auctions. German April ZEW economic-sentiment indicator.
--Wednesday, April 18: Extended deadline for some Greek foreign-law bond holdouts to tender their bonds.
--Thursday, April 19: Spanish, French bond auctions. Meeting of Group of 20 deputy finance ministers (through April 22).
--Friday, April 20: German April Ifo business-climate index. Annual spring meeting of the International Monetary Fund/World Bank (through April 22).
--Sunday, April 22: French presidential election, first round.
--Tuesday, April 24: Spanish T-bill auction.
--Wednesday, April 25: Allotment of ECB three-month long-term refinancing operation.
--Thursday, April 26: Italian T-bill auction.
--Friday, April 27: Italian bond (BTP) auction.
--Monday, April 30: Euro-area March M3/private-sector loan data. Euro-area April inflation data.
--Wednesday, May 2: Euro-zone April manufacturing PMI data.
--Thursday, May 3: Spanish, French bond auctions. ECB rate decision and press conference in Barcelona.
--Friday, May 4: Euro-zone April services PMI data.
--Sunday, May 6: Possible second round of French presidential election. Possible Greek elections (April 29 and May 13 also likely dates).
--Monday, May 7: German March manufacturing-orders data.
--Tuesday, May 8: German March industrial-production data. Greek T-bill auction (tentative).
--Friday, May 11: Italian T-bill auction.
--Monday, May 14: Spanish, Italian bond auctions. Euro-zone finance ministers' meeting.
--Tuesday, May 15: Euro-zone flash 1Q GDP data. German May ZEW economic-sentiment indicator. EU finance ministers' meeting. Greek T-bill auction (tentative). EUR450 million Greek foreign law bond matures.
--Wednesday, May 16: French bond auction.
--Thursday, May 17: Spanish bond auction.
--Monday, May 21: Belgian bond auction.
--Tuesday, May 22: Spanish T-bill auction.
--Thursday, May 24: German April Ifo business-climate index.
--Monday, May 28: Italian bond auction (zero coupon/linker).
--Tuesday, May 29: Italian T-bill auction.
--Wednesday, May 30: Italian bond auction (BTP). Euro-area April M3/private-sector loan data. Allotment of ECB three-month long-term refinancing operation.
--Thursday, May 31: Euro-area May inflation data. Ireland holds referendum on EU fiscal pact.
http://www.nytimes.com/interactive/2...ro-crisis.html
=================================== =================================== ==================
Links to Italian bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
Links to Spanish bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
Links to Greek bond yields (15 minute delayed)
2 Year - 3 Year - 4 Year - 5 Year - 6 Year - 7 Year - 8 Year - 9 Year - 10 Year - 15 Year - 20 Year - 30 Year
The latest 10 Year Government bond yields
=================================== =================================== ==================
YOU MUST READ THIS:
Don't get trapped in a marriage you cannot handle.
Always use sound money management techniques.
It will save your account and your emotional well being.
I've been trading forex for almost 10 years now. Back then it was a completely different market. If you had a 100 pip move in the EUR in a day, you were lucky. Things were much calmer and the retail forex market was smaller with much less liquidity and volume. Therefore, fundamental analysis and general market sentiment was more important than technical analysis. However, it didn't really take much effort to be a position trader. All you had to do was buy euros on every dip and let them all ride for as long as the fundies and sentiment pointed upwards. The only indicators I used back then were fibonacci tools, a 10ema and a 144ema.
Then came 2008 and everything changed. The markets became more irrational, less predictable and more challenging to stay in the game without more in-depth technical analysis. But that only applies to intraday trading.
From a position trader's perspective looking at the very long term, if you look at the monthly Euro chart, I see the formation of a bull flag on its way to completing wave 5 downwards. My target based on this view is around the 1.12 handle which makes it a 61.8% retrace of the 2000 lows at 0.8225 to the 2008 highs at 1.6019.
Obviously these moves do not happen in a straight line so let's take a closer look at this same monthly chart. Right now I see that we are sitting on a falling trend line offering relatively medium support at around the 1.35 area (Where we are now). The monthly candle for September has significantly pierced this line, rebounded, and is now challenging it again.
From a purely technical perspective, assuming this area offers major support, the move further down is not likely to happen until the October candle and from this candle's lows at 1.3383 we should expect a rebound of approx 200 to 300 pips upwards to approx 1.3585 to 1.3685 (If we look at smaller time frames we would be able to more closely narrow down the targets but for the purpose of this post we will stick to the monthly perspective only).
The above mentioned 200 to 300 pip estimate is based on the monthly rebounds of similar long term trend line penetrations. More specifically the 2008 downward penetration of the long term rising trend line and the similar 2010 downward penetration of the newer long term rising trend line. (Refer to chart)
Now, without getting into too many specifics, let's add some of the current fundamentals and general market sentiments to the picture. I will provide some reference to some news articles which back up my following statements but I am not going to get too in depth here as it would take far too much space. This is just one post and not an entire thread. LOL
1. The situation in Europe is all doom and gloom and the politicians do not seem to be doing much about it. Every day more and more economists are calling for a Greek default. Politicians who were opposed to a default are now admitting that a default becomes more and more possible each day. They do not want a default because they do not know what the outcome would be and how much damage it would inflict on the economy. However, they are now starting to realize that kicking the can down the road just causes more uncertainty in the markets and in corporate & consumer confidence. This is not good for the global economy. Therefore, default or no default, the outlook is negative.
http://www.forexcrunch.com/greek-def...r-6-countries/
http://www.bloomberg.com/news/2011-0...om-europe.html
2. The growth forecasts have once again been adjusted downwards. The ECB will eventually have no choice but to reverse its rate increase of 0.5% earlier this year. This move will probably come at the next ECB council meeting and be reflected in the October rate statement. The only question is if it will be 0.25% or the full 0.5%.
http://www.reuters.com/article/2011/...78M03Z20110923
I think I've said enough for now. I suggest you keep your eyes on the news section and perhaps tune in to CNBC and/or Bloomberg to get a better sense on what is going on out there. You don't need an economics degree to figure it out. The writing is on the wall and the technicals support the fundamentals as well as the general sentiment.
In conclusion, we should all realize that nobody can predict what is going to happen. We can only make our next trade decision based on the best information available to us. The best chance of a trade being successful depends on how all three analysis methods line up with each other. Confluence of everything, just like when all your technical indicators point to a specific direction. If you ignore the fundamentals, you're not doing a compete analysis and your chances of loss increase.
Happy trading and good green profitable pips to all
ليست هناك تعليقات:
إرسال تعليق