Atilla
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Down side is limited and has greater upside probability in summary, but I don't, the Euro is not through the woods just yet.
I think Brexit talks are softening, with transition period as well as some kind of contribution for free market access on the table. Talk of hard brexit is really foolish imo. Risks breaking up not just the city of London but also the Conservative party and creating issues with UK union.
I really think both Cable and Euro are linked in their fortunes so as all these exit fiascos die down both currencies will strengthen. We've already seen positive moves from cable.
Market thinks, both the EU and UK mutually benefit each other I reckon and market is always right.
However, until early next year when more clarity falls on the negotiations and what the other side of Brexit may look like, it may be premature to step in at this moment in time. Espcially in light of indeces making new highs coupled with Italy banking issues, French and German elections early next year.
I would like to see Euro breach 1.077-1.08 and let others lead the way before stepping in.
fwiw I do tend to err on the side of caution and so may well be off. This has the makings of another legendary call by you similar to USDJPY. Either way best of luck
So the fed met expectations although they are somewhat optimistic with Trump about to shuffle the deck. I see cheap prices available time to load up. This one is resting on resolution of Italy's issues starting with support of banking followed by government policy reform—not as easy as the last one but will give me at least a 3 percent appreciation in price. With momentum, which I hope inflation will spark, hopefully will see a healthy return.
time to load up. This one is resting on resolution of Italy's issues starting with support of banking followed by government policy reform—not as easy as the last one but will give me at least a 3 percent appreciation in price. With momentum, which I hope inflation will spark, hopefully will see a healthy return.
counter_violent
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Price n time moves, momentum, fundamentals all still showing solidly for the downside. 0.92 - 0.96 then I might start looking for a turn. Just too much risk around all things EU and if USD continues to strengthen short to medium term, then any upside Euro should be sold into. No signs of any accumulation at current levels.
Atilla
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I agree yes and just re-read my previous post and have no idea how I came out with that first sentence.
Down side is limited and has greater upside probability in summary, but I don't think the Euro is through the woods just yet.
Blame interruptions and multi-tasking
Well aside from Italy, the top 4 economies have been showing signs of recovery in employment, production, and inflation. It's exactly the same scenario that lead to the USA raising rates. The difference is political, structural, and stability - which essentially is my risk. A key component in my plan is oil price stability which will return inflation at a far greater pace creating momentum for policy change and paving the way to glorious interest rates. Well at least that's how I have this all planed out.
plan on working this for the next 6 months at least. Thereafter brexit risk diminishes my interest
plan on working this for the next 6 months at least. Thereafter brexit risk diminishes my interest
Atilla
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Current support PP levels I have are:
PP @ 1.0570
PP-S1 @ 1.0470
PP-S2 @ 1.0390
PP-S3 @ 1.0220
PP-S4 @ 1.0050
Support 3 @ 1.0220 may get tested but Euro going on par or below the dollar would be an absolute scream buy imo.
I wish and if it tallies up with strengthening Pound that'll be fabo.
PP @ 1.0570
PP-S1 @ 1.0470
PP-S2 @ 1.0390
PP-S3 @ 1.0220
PP-S4 @ 1.0050
Support 3 @ 1.0220 may get tested but Euro going on par or below the dollar would be an absolute scream buy imo.
I wish and if it tallies up with strengthening Pound that'll be fabo.
Atilla
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I scalp in both directions on 1-5-15m TFs but wrt swing trade no position on Euro.
Have changed direction on cable though, bullish and buying the dips.
UK position softening and cable will test 1.28 sooner or later.
counter_violent
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Was short EurUsd pre fed news , dropped nicely for 85 points. then short again after the retrace into the close, picked up another 20 points.
First move down in Asia sees EurUsd just 8 points shy of the 2 yr low. We could ponce about a bit here or the level gets smashed this week.
Nice, was a no brainer trade to take.
LONDON, Dec 15 (Reuters) - Businesses in the euro zone ended the year on a high note, as expected, according to a survey that showed they achieved solid growth and raised prices at the steepest rate since the middle of 2011.
The upbeat survey will please policymakers at the European Central Bank, who in a surprise move last week trimmed their asset purchases but promised protracted stimulus to aid a still-fragile recovery and bolster weak inflation
IHS Markit's Euro Zone Flash Composite Purchasing Managers' Index, seen as a good overall growth indicator, held steady at November's 53.9, which was the highest reading this year and comfortably above the 50-point line that indicates growth. That was in line with the median forecast in a Reuters poll.
"It's a good reading. The forward-looking indicators are quite positive, putting a good start to the year on the blocks," said Chris Williamson, IHS Markit's chief business economist.
"This was a big development in December - the intensification of inflationary pressures," Williamson said.
Activity in the bloc's manufacturing increased at the fastest pace since April 2011. That PMI was 54.9, up from 53.7, way above even the most optimistic forecast of 54.1 in a Reuters poll of 34 economists.
An index measuring output, which feeds into the composite PMI, climbed to a 32-month high of 56.1 from 54.1.
Suggesting factories will start the new year in good shape, they built up backlogs of work at the fastest rate since April 2011. The sub-index climbed to 54.8 from 53.3 and a new orders index also jumped.
"People are underestimating the impact the weaker euro is having. You have the twin impacts of increased export performance to non-euro countries, but also within the euro area you are getting more import substitution," Williamson said.
The upbeat survey will please policymakers at the European Central Bank, who in a surprise move last week trimmed their asset purchases but promised protracted stimulus to aid a still-fragile recovery and bolster weak inflation
IHS Markit's Euro Zone Flash Composite Purchasing Managers' Index, seen as a good overall growth indicator, held steady at November's 53.9, which was the highest reading this year and comfortably above the 50-point line that indicates growth. That was in line with the median forecast in a Reuters poll.
"It's a good reading. The forward-looking indicators are quite positive, putting a good start to the year on the blocks," said Chris Williamson, IHS Markit's chief business economist.
"This was a big development in December - the intensification of inflationary pressures," Williamson said.
Activity in the bloc's manufacturing increased at the fastest pace since April 2011. That PMI was 54.9, up from 53.7, way above even the most optimistic forecast of 54.1 in a Reuters poll of 34 economists.
An index measuring output, which feeds into the composite PMI, climbed to a 32-month high of 56.1 from 54.1.
Suggesting factories will start the new year in good shape, they built up backlogs of work at the fastest rate since April 2011. The sub-index climbed to 54.8 from 53.3 and a new orders index also jumped.
"People are underestimating the impact the weaker euro is having. You have the twin impacts of increased export performance to non-euro countries, but also within the euro area you are getting more import substitution," Williamson said.
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Atilla
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Here is a quick analysis of what I'm looking at.
Chart shows long term monthly Euro v Cable. Mainly Euro in candle sticks.
Previous bottom played out a H&S move. We haven't seen that just yet.
So ideally would like to see some HHs and a break of the neckline.
Also, the parity with dollar looks likely to be very strong support as per circles.
How does that saying go, bottom pickers have smelly fingers or somefink
On a serious note, subject to next year wrt outcomes, imo - upside > downside.
Chart shows long term monthly Euro v Cable. Mainly Euro in candle sticks.
Previous bottom played out a H&S move. We haven't seen that just yet.
So ideally would like to see some HHs and a break of the neckline.
Also, the parity with dollar looks likely to be very strong support as per circles.
How does that saying go, bottom pickers have smelly fingers or somefink
On a serious note, subject to next year wrt outcomes, imo - upside > downside.
Attachments
here is what i am looking at:
Employment and inflation has been ticking up. Inflation is relatively correlated with crude prices and with the agreement globally to reduce production is a huge development which will accelerate inflationary pressure in H1 next year. I follow the USA closely and although there is growth it isn't the strength there that merits this dollar interest. What we have here is a typical case of over reaction in the markets. The rate hike was priced in and the shoots of recovery are not strong enough to back the extension. NFP private has actually been decreasing on average over the year while government NFP has been increasing on average. Manufacturing has been recovering at a very slow pace. Youth unemployment is rising and wage growth has been slow. Look it was enough of a recovery that lead me to get into the dollar trade in the first place but it's now run its course.
If anyone thinks the Fed is going to raise rates 3 times next year i should point them to the fact that they said 4 hikes in 2016 and every month was a letdown due to slow growth and we only have 1. In other words, if they raise it 3 more times next year ill eat a well used pair of socks.
there there are trickles of shoots like this all over the place:
- Goldman Sachs upgraded European banks to overweight in their asset allocation for 2017
- "We are ending our two-year cautious European Banks stance," J.P. Morgan analysts wrote
- At the start of 2016, investors all but threw in the towel on the European banking sector. Stocks dropped to 2008 crisis-era lows as investors braced themselves for years of litigation problems, ultra-low interest rates and grinding restructuring plans.Bank of America Merrill Lynch's December fund manager survey showed allocations to bank stocks surging to record highs, with a net 31% of fund managers overweight on the sector's stocks.
As for Italy, the government is ready to back struggling banks so there really isn't any risk of them going bust.The EU -JunkFace has said they will step in if needed. The real risk here is Greece who seem to be at odds with their monster debt but ultimately Greece has 11 million people and is 19th in size of economy.
Whatever the trough is going to be, we can't be far from it.
The middle image is PMI
Employment and inflation has been ticking up. Inflation is relatively correlated with crude prices and with the agreement globally to reduce production is a huge development which will accelerate inflationary pressure in H1 next year. I follow the USA closely and although there is growth it isn't the strength there that merits this dollar interest. What we have here is a typical case of over reaction in the markets. The rate hike was priced in and the shoots of recovery are not strong enough to back the extension. NFP private has actually been decreasing on average over the year while government NFP has been increasing on average. Manufacturing has been recovering at a very slow pace. Youth unemployment is rising and wage growth has been slow. Look it was enough of a recovery that lead me to get into the dollar trade in the first place but it's now run its course.
If anyone thinks the Fed is going to raise rates 3 times next year i should point them to the fact that they said 4 hikes in 2016 and every month was a letdown due to slow growth and we only have 1. In other words, if they raise it 3 more times next year ill eat a well used pair of socks.
there there are trickles of shoots like this all over the place:
- Goldman Sachs upgraded European banks to overweight in their asset allocation for 2017
- "We are ending our two-year cautious European Banks stance," J.P. Morgan analysts wrote
- At the start of 2016, investors all but threw in the towel on the European banking sector. Stocks dropped to 2008 crisis-era lows as investors braced themselves for years of litigation problems, ultra-low interest rates and grinding restructuring plans.Bank of America Merrill Lynch's December fund manager survey showed allocations to bank stocks surging to record highs, with a net 31% of fund managers overweight on the sector's stocks.
As for Italy, the government is ready to back struggling banks so there really isn't any risk of them going bust.The EU -JunkFace has said they will step in if needed. The real risk here is Greece who seem to be at odds with their monster debt but ultimately Greece has 11 million people and is 19th in size of economy.
Whatever the trough is going to be, we can't be far from it.
The middle image is PMI
