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Reflection: EUR/USD, Tapering.. is ECB crazy or is not?This post is not intended to be an investment advice or a prediction. It´s simply a look at the current economic situation in the Eurozone based on macroeconomic data and historical behavior. - - - - Mario Draghi woke up the beast in Sintra (Portugal) with a speech that was interpreted as hawkish. At that time everyone understood the possibility of tapering by the end of 2017. As a result: investors bought euro in a massive way. At the subsequent meeting of the ECB, Mario Draghi tried to contain the rise of the euro with a dovish speech but finally the pressure of the press brought the magic words and Draghi talked about the possible discussion of tapering in September. As a result: investors bought euro again on a massive way. The magic word for the next few months is: Tapering!!. Is Draghi hawkish or dovish? and most important... is Europe ready for tapering or even more, for a rise of interest rate?. Let's take a look at the USA in 2014 and compare with Europe: 1. Tapering in the US was announced in 2013 and was subject to a couple of goals: an inflation rate of 2% and an unemployment rate below 6%. Tapering finally began in 2014 after 2 years with an inflation rate consolidating around 2%. At this moment inflation rate in Europe still cannot go up to 2%. In fact, it has only arrived a couple of times this year. Moreover the price of energy (brent) is on the ground, something that does not help. On the other hand, unemployment rate is above 9%. Far from its previous levels in 2008, before financial crisis. 2. The debt of the eurozone (and several of its countries) is within the world top 15. Would it be convenient to raise interest rate and pay more for that debt immediately? 3. Germany is the strongest economy of Europe and an exporting country. A stronger Euro through a raise of types does not seem the most convenient in the near future. 4. The euro has just broken an active range since 2015 in mid-summer with low trading volumes. This area is also 0.23% fibo of the 2008´s big fall. After 5 consecutive months of climb without a correction. Is a strong/key resistance like this so easy to break? Apparently it is. Due to a weak dollar involved in a political drama. It´s true that macroeconomic data are improving in Eurozone but is it enough for tapering this year? Draghi will play its cards and we´ll believe him... or not.
by DiegoRV
2
EURUSD Short - Plenty of Signs but Momentum Prevails1.16 - 1.17 is the top of range set over the last 12 months. Before this 2017 surge, price pulled back twice (and rapidly) from that range. Now its up again, and when looking at the CFTC Commitments of Traders Reports, Speculators have rarely been so long (i.e. crowded on the same side of the trade). Surely a pullback is due any minute now. And yet... momentum is strong, and this can be seen by the slow, steady climb of the rally. If prices stay around or above 1.17, then with far greater confidence the top will be near 1.20 - the floor that prices crashed through in 2015.
by MVedra
2
A study of my wrongdoing Yesterday at my "Euro's comeback" analysis, I've suggested a pretty cut long opportunity for some chosen Euro pairs: EURUSD, EURAUD, and EURJPY. The rationale for this "pretty cut long opportunity" is the strong buy signal -- a bullish fakey pin bar. I also suggested to you to read Nial Fuller's educational writing regarding the said Price Action Bar. If you did, you'd know it is ideal to enter at the 50 pct of the bullish fakey pin bar. However, for my own comfort. I enter a limit at 50 and a stop at top of the pin bar. I now have two running trades at each of my suggested long trade set-ups: at the 50 pct and at the top of the pin bar (except for EURUSD which never got to 50 pct so I chased it at 61.8 pct). I've been long EURAUD since 05.15.2016 (www.facebook.com This is my post regarding longing EURAUD and shorting AUDCHF); it had a fakey signal and also was an inside bar in weekly just right at the 200sma. Good spot to long! However, my emotion got to me and closed my trades early. If I haven't... just imagine what those 1 lot trades could be now . Lesson learned! Moving on...
Long
by bearvsbullmarket
Please Mind the CACOn the 24th April the CAC 40 made a huge gap up, from 5050 to 5260. An incredible 4%. In fact it is the largest gap we can see historically as far back as 2008. Gaps, as trades know, 'always' get filled. Statistically its more like 90% of the time. Whether bullish or bearish on the European reflation story, this trade is the same.. French stocks are likely to pull back to close this gap, before either continuing on their rally, or otherwise. Trade execution: A conservative way to play this would be see the actual gap as being highest high previously, which is actually 5140 (blue line). A more aggressive short target would be the 5050 from where it jumped.
INDEX:CAC40Short
by MVedra
Swiss SMI at All-Time Highs*! Its worth pausing..*All time high ('ATH') on a Total Return basis (dividends reinvested) 1. SMI has rallied an incredible 4% month to date, 7% in 30 days. 2. 'ATH's are defined as a tops set and not surpassed for several quarters to years. 2. We distinguish between rallies below the 'ATH', and rallies above 'ATH'. 3.a. Rally to the 'ATH' (from below) can continue similar momentum for a couple more weeks, 3.b. Rally above the ATM tends to be marked by greater volatility, and pullbacks following on average 3 to 4% gains. We are in the latter. 4. The last 'ATH' was followed by a 14% pullback. 5. Relative Strength at extreme overbought. Trade idea: Short, but with a stop x% above current level to mitigate a further upswing. Up to you to decide x!
SIX:SMIC
by MVedra
Near the money Strangle on Euro Stocks (FEZ ETF)We have the French election coming up and other than my trades on FXE I didn't have much on play for that. The IV Rank on FEZ is pretty high at 77 and I am selling the strangle with 30 days to go. After the first part of the election we might get a decent volatility. I am betting that Euro companies won't be impacted as much and I can get paid on the expensive premium. Sold the 35/36 Strangle for $2.03 per contract. 55% probability of profit.
AMEX:FEZ
by AlexanderGotay
4
Draghi helping to catalyse EUR/USD bullsThe previous push above the 1.0825, (38.2%) Fibonacci retracement of the May-December fall and the 1.0870~ high of December 2016 has not been sustained, with EUR/USD falling back into range. Downside risks, however, are expected to remain limited, as momentum studies continue to strengthen and positive divergence unwinds. In the coming months, fresh gains are looked for, as investor sentiment gradually improves. A close above the 1.0900~ high of March will further improve sentiment, and open up the 1.0970~, (50%) Fibonacci retracement and congestion around 1.1000. Beyond here is the 1.1125, (61.8%) Fibonacci retracement. Support remains at 1.0500 and extends down to the 1.0340~ year low of December 2016. This area should underpin any immediate setbacks, as the Tension Indicator (not shown) continues to improve. A break, however, would see increased selling pressure and confirm extension of the broad 2008 bear trend. Focus would then turn to the 1.0065, (76.4%) Fibonacci retracement of the 2000-2008 rally and psychological support at parity.
by Michael_Macdonald-XATSUK
EURGBP H&S . Prepare your shorts!To me this is just perfect. I had this pitchfork in my graphs for more than a year and it has been very accurate. Break the Pitchfork and complete the Head and shoulders pattern and our target is back to 0.76. All the read lines from the peaks to the baseline are copied and pasted. Only exception is the last right small peak that was a bit shorter! You can see the two peaks on each side as one shoulder each, peaks closer to the head are higher than the ones further from the head. The also have the same length, despite the right one taking a bit longer to play out.
Short
by BitcoinMacro
DAX and other European indices (Points and Figures): Fake out?So "they" want everyone to turn bullish (whether artificially or not) or be stopped out. The weak buyers are being washed away, shorts must be covered or the shorters will burn their feet if that's not already the case. Retail investors are still very bearish overall, but what is observed in Europe and in the official financial news show that money is flocking to European equities, among other things (even real estate is "booming" again). Indices are compelled to go higher, but the exhaustion seems to be nearing. Summer could be very frustrating. Volume seems to be impressive, but for such small moves (green XXX) at the time I am writing this post, this appears to be not. Volume is accumulating, we see final explosive moves, this could signal the beginning of the end of a bull market. But it will still grind up. It's better to buy pullbacks with tight stop loss orders, or wait until it goes way up if people want to short. However, we don't know yet when this will truly end. I would expect spikes and fake out. Reversal days could be extremely tricky.
FX:GER30
by UnknownUnicorn569872
BUY EURUSD FOR A 250 PIP BULL MOVEI like this fundamental situation surrounding the euro. We have inflation inching up and talk is ramping up about rate hikes in the ecb. On the other hand we have this conflict in the US politics that is weighing on the dollar. In the last 2 days we made a simple corrective move from the 1.09 swing high. A perfect situation in my view to buy this dip looking for the continuation to happen. Technically we have a triangle breakout and now retest of the breakout spot. Also take a look at the bold green line. Bulls were able to conquer it back and now we are also retesting it. Blessings..
Long
by IamJeanPaul
1