to supplement your supplement, PLEASE understand there is a method to this mayhem !
After 36 years of trading, and 7 devoted to forex only, one sees this activity REPEATEDLY, and of course, all of the news media HAS to say something !
If the EURO falls, by its nature the USD goes up, so no big surprise here ---- but please understand, the EURO was ALREADY FALLING, and the announcement combined with the already existant downward movement is what caused this activity.
I guess what Im trying to post is that there is a REALITY about forex and its movements, unlike those of equities, that can be predicted and directed by the "pros" and their banks, and that WE can learn to observe how it works and use to our advantage.
Those who believe the news directs the trend of currencies repeatedly fail to notice that news will ALTER the trend for a few hours or perhaps days, BUT the currency then RETURNS to its original trend, almost to the pip ! This proves that fundamentals only alter short term trends momentarily, but that technical is what's driving the market or it could NOT BE SO PREDICTABLE !
WATCH some day when news, that should make a massive movement on a currency, does NOTHING for a day and then, the day AFTER the news, the predicted movement takes place ---- LOOK to see where the currency and the DOW were in relation to the top or bottom of the LRC and where it was the next day. If on the day the BAD news was released and the currency was not at the TOP of the LRC, it would have continued UP during the day of the announcement, REVERSING at the next major reversal point in the day, because NOW the banks had driven it up to the point of shorting nicely !
I KNOW youve all seen this --- THAT is the explanation !
NEWS is a catalyst, on VERY rare occasions a trend changer but the "big boys and girls" ALREADY know what its gonna be, headfake you at the release of the news by moving the currency in the opposite direction to where they will ACTUALLY move it, and watch as you get stuck LONG, when theyre all SHORT !
there be a lot to learn about the badlands, kimmosabe !
enjoy and trade well
mp
To supplement what PualoP said and as a postmortem, read the Reuters news
FOREX-Euro flops after ECB's Mersch warns on growth | Currencies | Reuters
...NEW YORK, Jan 16 (Reuters) - The euro fell sharply on Wednesday after a European Central Bank official warned that growth in the 13-nation region could be slower than expected, fanning fears that U.S. economic weakness may be spreading to Europe.
The euro plummeted nearly 2 cents against the U.S. dollar after ECB Governing Council Member Yves Mersch told Bloomberg News that he did not rule out a downward revision of euro zone growth forecasts for 2008, and that the bank should remain flexible with regard to fighting inflation.
...The comments also triggered a broader recovery in the dollar.
...as futures markets reflected increased expectations for lower euro zone interest rates this year, the dollar rebounded.
...The euro's decline gained steam as it broke below key technical levels against the dollar and other currencies.
Anybody who was able to trade the news release must be very happy... :cheesy:
