What happened EUR/USD on 16 Jan?

CashOutChick

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EUR/USD at about 15:00 UTC, it tanked by more than 100 pips! What happened? I could have stop and reverse but no thanks to my trading platform which "froze" due to some "pricing issue", I lost more than a thousand dollars in a few seconds! Can someone please explain what could have caused the EUR to move so much against the USD?
 
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EUR/USD at about 15:00 UTC, it tanked by more than 100 pips! What happened? I could have stop and reverse but no thanks to my trading platform which "froze" due to some "pricing issue", I lost more than a thousand dollars in a few seconds! Can some please explain what could have caused this EUR to move so much against the USD?

A " pricing issue " could have been a gap or some sort of reverse blow off volume, although that usually only happens in an uptrend -
or away from the technicals, have a look at todays economic reports and check whats been moving those pairs..
The stock indices have been on the slide mostly because of the bad figures from Wall St and as investors are bailing out of stocks,the moves into currencies make the volatility even worse - so big swings are sure to happen..!!
 
I read that it was due to europe saying that they would have to revise their GDP figures for 2008. But yes, you are right, not listed on any news site! Maybe it would have been useful to have had bloomberg on the TV - who knows!

Bob
 
It was all over the wires, ECB's Mersch said that there were possible risks to growth with the current stance on interest rate policy. Everyone took that as a given that there was a probalility of change in interest rate policy, no longer 100% hike or hold.

Bloomberg.com: News
 
Mp -- The Diving Eurusd Routine.

with full agreement to PualoP, understand that the currency had been pushed to the top of its LRC for a number of days prior in full anticipation that the news would be released.

Technically, the currency was already on the way down, having peaked and now being shorted down --- with the release of the news, the shorts aided by news driven momentum (LOTS of other shorts hopped on the downward run) drove the price down in ways reminescent of some of the best GU would have to offer !

Enclosed Daily chart is of EU and shows a few days prior to your hour of surprise, and as you can see it was rising and the single white arrow shows the (close to) double top, and then the descent. The TWO white arrows are the day in question !

I would love to agree with the "fundamentals" traders, BUT on any news report, expected or not, the traders have a full fledged research dept whose job is to KNOW in advance what is going to be said, and they drive the currency price in the direction that suits what will result from that news ! In other words, if the news is going to be BAD, they drive the price up so when they short, they are shorting from the HIGHEST price they can reach, and reverse for GOOD news !

The reality of forex is greed and money, and pros are only interested in creating larger bonuses, so when you next see this happening, "whip out" your LRC and see where the currency IS --- then bet against the prior movements, if only for a few days !

Thats all that happened !

enjoy and trade well

mp




It was all over the wires, ECB's Mersch said that there were possible risks to growth with the current stance on interest rate policy. Everyone took that as a given that there was a probalility of change in interest rate policy, no longer 100% hike or hold.

Bloomberg.com: News
 

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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:
 
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:
 
...and this was all obvious in the sell off earlier in the Australasian markets.......... Its just you boys get up later than us!
 
EUR/USD at about 15:00 UTC, it tanked by more than 100 pips! What happened? I could have stop and reverse but no thanks to my trading platform which "froze" due to some "pricing issue", I lost more than a thousand dollars in a few seconds! Can someone please explain what could have caused the EUR to move so much against the USD?

The whole day blew nearly all my daily signals off course.:mad:

Really sorry to hear you lost a lot. It can knock your confidence. COC, you may have traded for years like me but if I may be so bold as to warn you against "revenge" trades. I have done this a few times and always lost. One must keep discipline, keep stops tight and trade what you see, not what you think.

Why don't I listen to myself then?........:eek:
 
What happened EUR/USD on 16 Jan?

Does it in any way really matter why what happened did occur ? What counts is trading according to what was going on and not presuming that something like this couldn't happen in my view.


Paul
 
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.
mp

Thanks for the reply. So are you saying that for equities, the pros and their banks can "direct" or "influence" the movement of the share prices and FOREX this is not possible?
I would think that banks can also direct price movements in FOREX. I am sorry but i do not think I understand you clearly.
 
It was all over the wires, ECB's Mersch said that there were possible risks to growth with the current stance on interest rate policy. Everyone took that as a given that there was a probalility of change in interest rate policy, no longer 100% hike or hold.

Bloomberg.com: News

YEPP :) that was the reason :)
 
Which is why imho simply trading off charts leaves you open to risk of stuff like this. You need to be aware of fundamentals, technicals, market positioning, rumours, geopolitics, correlation to / interrelation with other products etc etc.

The most relevant couple lines in the whole thread.
 
The 3 ducks sytem worked well here. As soon as price fell below the 4 hour moving average, the price accelerate downwards.

Good times!
 
Prior to the fall, the daily chart was showing a double top chart pattern, extensive resistance between 14870 and 14900+ and bearish regular momentum divergence. In other words, the chart was telling you that there was a good probability of a retracement back to support rather than piercing through the resistance zone.
 

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WRONG !!!

We get up on time ---- youse peeps, being mostly an agricultural society that has little familiarity with technology or the modern world, get up WAY too early !!
LOL

but in all seriousness, those that trade the US mkt should always take a look at what you peeps do so we have an idea, going in, of which way to move !

enjoy and trade well
mp





...and this was all obvious in the sell off earlier in the Australasian markets.......... Its just you boys get up later than us!
 
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