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Shorteurodollar

Overall Bearish Outlook EURUSD SHORT 1.) Price is in the monthly/weekly supply zone. Price has had trouble breaking this zone and I think price was just consolidating and gathering momentum to make a bearish push. 2.) Price formed a double top, after an uptrend. A double top formation at the end of an uptrend can signal a potential reversal. 3.) After forming a double top, price then broke the neckline. Once price breaks the neckline of a double top/double bottom formation, it is common to expect price to retrace to the neckline and meet resistance before making another impulse. 4.) I think price will create another impulse to the downside and am looking to take profit near the 50.0 fib level.
Short
by NoCeilingsTrading
SHORT EURUSD: ECB MEMBER NOWOTNY + DOWNSIDE ECONOMIC REVISIONSECB nowotny reiterated senior member official sentiments regarding the situation with Italian banks unsurprisingly saying people "Should not over dramatise situation regarding Italian Banks". He also hawkish said that the Brexit impact forecasted on the EUROZONE economy would be less than the IMF forecasts. Perhaps the most important sentiment though was that regarding the ECB's APP which is due to end in March 2017 saying "Future path of QE decision to be made in Q4" and "Still open to whether to phase QE purchases out or not" - providing little inferences whether the ECB expects to extend or end their APP. However, one would think, unless the underlying inflation trend was to pick up, certainly there would be an extension/ phase out of QE. A source from social media reported on the matter with more conviction and to the hawkish side saying "Reports Said To See No Current Urgency For QE Action In September". Nowotny playing his cards close to his chest regarding the future ECB QE path is unsurprising, however, the Social Media Report claims are a little more worrying given they somewhat write off fresh QE action for the ECB's september meeting - something which many banks/ consensus thought would be the case, given the persistently low Euro inflation and hints from ECB minutes/ Draghi that maturity extension would be likely at the September meeting. However, the authenticity/ reliability of the reports has to be considered given the source is social media. On a more certain note the ECB Polled forecasters posted dovish/ EUR bearish economic outlook figures for EUR, downgrading GDP and inflation readings for 2017 and 18, with 2016 staying unchanged . Trading strategy: 1. This personally doesnt change my material medium-term short EUR$ 1.1100 trade as the macro headwinds/ future headwinds described in previous posts still go unpriced. Though the short view is weakened slightly IF the above "no QE extension" is true since some of the future EUR$ downside was based on further ECB easing. Though all of which is just speculation, and without any conviction from officials, waiting for the September decision itself seems the smartest thing to do continuing short - especially as forecasted GDP/ Inflation figures have been reduced which is bearish for the EUR and as the USD leg of the trade continues to strengthen as rate hike expectations continue to increase in this risk-on market with Fed Funds Futures Opt Implied probs now trading at 19.5% for Sept, 20.8% Nove and 40% for Dec, up from yesterday at 18.8, 20 an 39.8 - the risk-on bias already started today will likely see these probabilities continue to strengthen until the end of the day. ECB Member Nowotny Comments: -ECB's Member Nowotny: "In principle decision from 2nd June not to employ new monetary tools remains true, new uncertainties have emerged." -ECB's Member Nowotny: Still open on whether QE will be phased out gradually or not -ECB's Member Nowotny: Future path Decision on QE to be made in Q4 -ECB's Member Nowotny: EZ 2017 Inflation Seen Over 1%, Sees No Acute Danger Of Deflation -ECB's Nowotny: BREXIT Effect on Eurozone GDP expected to be less than IMF forecast -ECB's Nowotny: Should not over dramatise situation regarding Italian Banks ECB Polled Forecasters: -ECB: Polled Forecasters See Eurozone 2016 HICP at 0.3%, Matching Previous Quarter -ECB: Forecasters See 2017 HICP at 1.2%, vs 1.3% Seen in 2Q -ECB: Forecasters See 2018 HICP at 1.5% vs 1.6% Seen in 2Q -ECB: Forecasters See 2016 GDP Growth at 1.5%, Matching Previous Qtr -ECB: Forecasters See 2017 GDP Growth at 1.4% vs 1.6% Seen in 2Q -ECB: Forecasters See 2018 GDP Growth at 1.6% vs 1.7% Seen in 2Q -ECB: 55% Of Respondents Included Estimate of UK Referendum Impact in Forecasts *See attached posts for more EUR$ downside fundamentals*
Short
by QuantumLogicTrading
TRADING CORRELATION PT 1- EURUSD: SELL EUR$ ON DXY MOVES HIGHER This 2-part article will look at the practical application of correlations in trading and show how to use correlation inferences to exploit the statistical advantages they offer. On the 4h time frame, the highest day-tradable timeframe imo we see EUR$ has an exclusively negative and almost 1for1 correlation with the dollar index (or dollar "market"), however, despite popular belief EU actually has a mixed and weak correlation with GU (as we see the EU v GU correlation move from positive to negative several times). This relationship is backed up by EU price action currently trading at +2sd of the mean, whilst GU performs the stark opposite at -2sd of the mean. We can use this information in 2 ways to trade the 4h time frame - please bear in mind this is the 4h timeframe only, corrs differ using different time-frames. 1. We know that EU and GU dont hold any confident correlation thus we SHOULDNT make trades based for EU based on GU - despite many people often trading EU based on GU moves. 2. Instead, we know 4h EU is highly correlated with the $ Market, thus we CAN make trades based on $ Index moves - so personally, i will wait for the $index to move/break higher, at which point i will then SHORT EU, since they have a 90%+ negative correlation relationship which is rising atm. - This imo gives us a perfect entry signal, once $ Index moves up we can then short the overweight EU which is trading at highly volatile levels above its average. I also like short EU fundamentally for: FOMC hawkish or hike on the 16th - must push eur$ lower BREXIT 23rd june - UK Referendum imo has NOT yet been priced at all in downside euro's yet (especially compared to GU, this is the main driver for the increase in negative corrs between the two pairs currently) ECB poor econ management - Eurozone is STILL suffering with below 0% inflation and 10%+ unemployment, i think this trend will continue throughout the year and ECB will have to do more printing/ issue more EURO supply side, thus moving EU down - especially if the FOMC hikes and the Monetary policy diverges more. I will shortly release a follow up article, looking at a higher time-frame to illustrate the different tradable inferences we can make.
Short
by QuantumLogicTrading
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