Intervention in the currency markets

[breadman]

As someone who has only been looking at currencies for about 18 months I was wondering what might happen if their is intervention. Does anyone have a view on how much the eur/usd, gbp/usd, eur/gbp might move. Would the initial reaction be a move of a couple of hundred pips in the first hour or two. Is the intervention likely to take place over the Christmas period while it is quite to catch as may traders as possible. Is the intervention likely to take place between 10pm 5am uk time as this seems to be a quite period for currencies compared to the rest of the day.

All views welcome,

Thanks,

Breadman

 

[Roberto]

I think the commonest sorts of interference in the currency markets come from the Bank of Japan, no? So probably not during the times you mention.

 

[dageshi]

US intervention

I think the commonest sorts of interference in the currency markets come from the Bank of Japan, no? So probably not during the times you mention.

Fxcm is claiming, well quoting from a German newspaper actually that there could be intervention if the EUR/USD breaks 1.45. (From the Yanks that is)

 

[TheBramble]

Can someone tell me what form intervention might take?

 

[maxpain]

It looks as if BOJ already on Friday was buying dollars. Believe they start buying at 102. No actions from the ECB yet. Bet some ministers have had a busy weekend.
http://www.bloomberg.com/apps/news?pid=10000101&sid=axRfAmrK_ifE&refer=japan
http://www.bloomberg.com/apps/news?pid=10000087&sid=awXrp0CSpGzs&refer=top_world_news

copied a chart from a good poster on a Swedish site - this is another option - fits in well with lower US-indexes next couple of weeks - :?:

 

[maxpain]

messed up this chart but it speaks nevertheless

 

[G-Man]

Interesting $index chart Maxpain.

It would suggest a mid-term bounce from the current levels, which does follow from some commentators 6-18 month outlook, but I think we would have to wait for confirmation of the right shoulder on the H&S pattern before we should target the 40 mark.

If that is confirmed, then 40 would only be hit 2008-2010, by which time I hope to be long retired!!! Bush will also be out of office, $ fundamentals may have changed, the Yuan revalued etc.

Still, $3-4 to a quid sounds an interesting concept. Can't see the ECB/BOJ accepting 1.8-2.4 or 60-80 respectively without a fight.

Could be some interesting times ahead.

G-Man

 

[FetteredChinos]

As someone who has only been looking at currencies for about 18 months I was wondering what might happen if their is intervention. Does anyone have a view on how much the eur/usd, gbp/usd, eur/gbp might move. Would the initial reaction be a move of a couple of hundred pips in the first hour or two. Is the intervention likely to take place over the Christmas period while it is quite to catch as may traders as possible. Is the intervention likely to take place between 10pm 5am uk time as this seems to be a quite period for currencies compared to the rest of the day.

All views welcome,

Thanks,

Breadman

nobody expects the Spanish Intervention

Breadman, i think you might be reading too much into this.

the government intervention (which is what i am presuming you are referring to) is for macroeconomic reasons to support local industry etc. as they are likely to be "interfering" with unbelievably large sums of money) the actual timing thereof is likely to be uncertain. they are likely to just feed a huge wad into the market gradually to either prop it up, or bring it down gradually. as for several hundred pip moves, then that is just guesswork. in some ways, you are better off just following the market. if it takes off, then just follow it with a trailing stop.

FC