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i've gone long Eur vs NOK and SEK in my demo system last night
currently +173 and -64
hope you can get the posted file above....
these are going strong still !! there was some inflation figures released re the NOK which pushed it up a few hundred quite quickly
lots of pips , tho not that many actual $$$
might wait for a 2 hour crossover on the std paramter MACD to sell them.
quote: Christina Andersen (Jyske Bank)
Yesterday, the Norwegian consumer prices came out below
expectations, leaving the key CPI (CPI- ATE, adjusted for tax
changes and energy) at 0.9 percent year/year. As a
consequence, EUR/NOK jumped almost 7 big figures higher in
Europe, New York and Far East, and the currency pair has
tested 801.50 as the highest. Further more, the Norwegian rates
fell approximately 10 basis points across the rate curve.
No doubt, this was a nice surprise regarding our bought
position in EUR/NOK. However, also EUR/SEK benefited, as
the Scandinavian neighbour, as well, ran against a brick wall,
and fell after the release of the Norwegian CPI figures. Now, it
will be interesting to see, whether or not the Swedish inflation
actually on Thursday will show the same picture.
This move higher in both EUR/NOK and EUR/SEK, has been a
healthy correction if you consider the two crosses latest flirting
in extremely overbought territory. We still expect more to come
in the ongoing correction, and will await a test higher in both
EUR/NOK and EUR/SEK before we intend to take profit in
our bought positions. In EUR/NOK, we expect to see a test
towards the area around 805, and in EUR/SEK the level around
940/942 is haunting on the topside. In our opinion, a test
towards these levels in the two currency pairs should be used
to buy the Scandinavian power again. Conclusion, stick with
sold positions in both NOK and SEK a while longer, and be
prepared to re-enter bought positions.
out now on both...
868 pips on the NOK
tho only 82 on the SEK (a bit disappointing as it did get up to 300)
doesnt amount to much $ tho
No doubt about it. Maket sentiment is clearly bearish on the
dollar in general as market participants eagerly try to pinpoint
all the fundamental weaknesses and the unsustainability of the
imbalance situation in the US. All good and right - but question
is still, whether or not now is the time for a shift of scenario on
the dollar? Well - technically the dollar continues to be oversold
right now, hence further downside momentum from the
present levels seems less likely. The recent frenzy on gold,
which by many is being interpreted as a loss of faith in paper
money and the dollar in particular, has led to overbought levels
not seen for many years. So a needed correction on gold could
easily go hand in hand with renewed strength on the dollar, as
panic gold buying is running out of steam. A look at the
interest rates in the US shows a jump higher on long-term
yields, which in the long run should continue to underpin a
stronger USD at least as long as the FED stays on their higher
rate course. And that's exactly the juncture of the dollar p.t. The
dollar sellers take it that the FED is done raising rates and the
few dollar buyers left take it that they are not. Whoever ends
up being right, the present rate level in the US is still so high
that selling the dollar could turn into an expensive experience,
unless of course the slide in the dollar is going to be
overwhelming. EUR/USD wise I continue to favour selling
EUR/USD at the present levels with stop loss at 124 and first
target around 118. I know it's like playing with fire as
EUR/USD is approaching our trend indicator at 121.77, but
hopefully "bravery" will be rewarded.
quote:A day like today - Martin Luther King Day - must be the day to
tell about my fx-"dream" (you might call it scenario) for 2006. A
dream that apparently is a "slow starter". The first remarkable
move on the dollar in general was down. A move that suited
most market participants with their USD-bearish hearts and
minds very well. The last week has, however, revealed a dollar
stuck between a rock and a hard place. At times like these it is
though very important to stick with your dreams/chosen
scenario in order not to get confused. Expected hawkish FEDtunes
are the main ingredients of my overall dollar-bullish
dream this year. A market surprised by further FED-rate hikes
will - the hard/expensive way - be forced into dollar-buying
once this deadlock will be over and done with. The back-andforth
trading the last couple of days is nevertheless not to be
ignored, as it reveals a market split in two. One side sharing
our dream of a higher dollar backed by high interest rates, and
the other side longing to "slam" the dollar as punishment for
the huge imbalances in the US. Hence the present levels are
really important - however dull they may seem - as everybody
is waiting for the dollar to take direction again. Once this
happens either in case of a definite break of 119.50-120.00 or
122.00-124.00 market participants will be scrambling to join the
new rush higher or continued slide on the dollar. Everybody is
having itchy fingers, all nervous not to catch the next big move.
Everybody wants to get off well at the start of the year. Takes of
steam - you see. Thus until proven otherwise I stick with my
dollar-positive dream, hoping it won't turn into a new dollarnightmare.
Looking at the financial market behaviour the last couple of
trading days makes me wonder if a special mixed stew is
actually cooking right now. Remarkable slides in commodity
prices right out of the blue, shaky equity markets, and a dollar
holding on to recently captured high levels in general.
Should our original thought of shrinking global liquidity finally
be slipping its way into the financial marketplace? Our thesis
being that less global liquidity will stirr violent financial waves
as volatility will rise abundantly. In that case the dollar in
general will come out the winner in the first round mostly
because of its reserve currency status. Such a development
would certainly astonish large parts of the fx-community, as
many traders still prefer causuality before seemingly
irrationality, probably causing a renewed rush into USD.
Thereby fuelling further - for many - unexpected strength. The
recent drop in the commodity currencies is primarily being
linked to the behaviour of the nervous commodity markets,
whereas we see it as consequence of the pursued monetary
policy and not least the expected change of the former. As far as
the rather hectic moves the last couple of days in USD/JPY are
concerned, lots of rumours of a potential change of the
monetary policy by BoJ are doing the rounds, which we,
however, do not expect yet. Bottomline being that the dollar
will have further to go against both the commodity currencies
and not least the JPY. Acually, we might not have seen
anything yet in currency market. The financial mixed stew is
cooking for real right now, and the smell is not that mouthwatering
as it could have been.
quote:* BoE is out today, hence holding the upperhand in
GBP for now. We do not expect any cut today, so
selling EUR/GBP at the present level or an eventual
spike higher still remains our preferred scenario.
quote:The drop in USD/JPY is
opening up for new
attractive buy levels around
117.50-118.00. I continue
favoring a revisit with the
old top around 121.40. The
USD/JPY rally is not over
yet - despite the fact that
many strategists predict
exactly that right now.
quote:This week could turn out to be the week where we
finally get a trend of substance in the fx-market. A
well-established dollar bullish trend could very well
be in the making.
Currency traders in particular have jumped the trenches up till
today's first real public appearance of Mr. Ben Bernanke - also
known as Gentle Ben. The newly appointed central bank
governor is going to appear before congress today and
tomorrow and deliver his economic state of the union speech.
All of a sudden market participants doubt whether or not they
have been running ahead of themselves in their present search
for US yield and not least the dollar. All eyes and ears will
therefore be directed towards even the slightest hint of a
temporary halt to the present restrictive policy or a continued
pursuit of the same. Whatever the outcome of the upcoming
speeches you can rest assured that Gentle Ben will be blamed.
Overall it will nevertheless be exciting to see/hear Bernanke on
the line. Especially the fx-trading community has had its doubts
that Bernanke will be the one to secure the value of the USD.
His remark (some say slip of the tongue) about eventually
dropping dollar bills from helicopters in order to fight deflation
- should any one occur on the economic horizon - is hard to
forget among fx-traders, who normally are not used to remarks
like this from neither central bank governors nor central bank
governors to be. Some say that Ben Bernanke could only
reassure them of his capability of securing the value of the
dollar by stating today that all American helicopters have been
grounded and the pilots have been dismissed. That's probably
the only thing we can count on he is not going to say today and
tomorrow. The USD in general might be shattered a bit the
coming days, but we see no further potential than to 120-121
against the EUR, before it will start to climb towards new highs
quote:* EUR/NOK is beginning to look toppish just below
our good resistance area at 815 as is EUR/SEK
around 932. An eventual weakening of the dollar in
the wake of Bernanke will undoubtedly put
pressure on both crosses.
quote:Despite several attempts higher the dollar finally had to give in
on Friday. Momentum had clearly been vanishing on the
stronger dollar. So now here we are at the beginning of the new
week. Actually, the present level in the dollar index is very
important, indeed. A definite break below 90.26 (119.70 in the
EUR/USD) will mean that the stronger for longer USD is going
to correct before heading higher again. Market participants
have simply been piling in the same boat with the strong USD,
whereby it got too heavy and lost steam. All good and well -
the dollar will prosper again, and a coming correction will do
nothing but add new and more fuel to the next dollar take-off
higher. Friday evening I myself did turn the spot as well and
are now in possession of net sold dollar positions all over the
place. In EUR/USD I established a new net bought position
with first target at 121 and stop loss below 118. In USD/JPY the
first target for my new 50% sold position is coming in at 116.75
and stop loss is running above 119.50. AUD and NZD as well
are about to gain a footing against the dollar in the short run.
Considering the loads of domestic problems haunting both
commodity currencies I will be happy to see a return to 75 and
68 for the newly established 100% bought positions. So all in all
we are once again in a corrective phase on the dollar in general.
Normally, not a very rewarding phase and certainly a very
dangerous phase. We need to see a snap follow-through on the
latest break lower on the dollar. Otherwise market participants
will soon loose their nerves and return to the dollar-for longerscenario,
but for now the USD is retreating.
With two monetary policy meetings in
Scandinavia on the agenda this week EUR/SEK
and EUR/NOK have been lying pretty low.
Nevertheless we have increased our positon in
EUR/NOK with target at 800 and s/l at 771.
The last few trading days have proven a true rollercoaster ride,
especially when you look at the Swiss franc. In time of writing
EUR/CHF is, again, flirting with the level around 155.80. Of
course the main reason behind the latest rise in volatility in
CHF is caused on behalf of the general dollar weakening, and
thereby technical selling in USD/CHF. However, also the Swiss
National Bank President Roth, along with a better than
expected KOF - indicator, has helped strengthening the Swiss
franc. Roth gave a speech late last week regarding economic
growth and future monetary policy and stated, that the central
bank is sticking to its forecast regarding growth and inflation.
Hence, a gradual rate tightening of 25 bp every quarter is
therefore broadly expected from the SNB. The new and
surprising aspect of Roth’s speech was, that he explicitly
mentioned FX moves as a key factor when looking at monetary
policy going forward. If the Swiss franc continues weakening
even further, a normalization of rates would be even more
necessary! Furthermore, Roth is this morning being quoted,
saying that Swiss growth in 2006 will be significantly above the
level in 2005. He is thereby adding further fuel to the present
burning fire, regarding rising market expectation of a 50 bp rate
hike in June. We still foresee a stronger CHF against the EUR
and our advice is still, to handle CHF – funding with care. Next
important level in EUR/CHF is 155.50 – 60, and afterwards 155
is lurking in the wings. Looking at EUR/CHF in a long term
perspective, it is important to mention that a move towards 153
cannot be excluded at all.
FX minds are seriously split these hours and days. Is it the real
thing happening on the dollar right now? By real thing I mean
anything Plaza Accord-like happening in the fall of 1985.
Entering the fx-market in 1986 myself, I truly remember the
days when selling dollars was the only way to go. No wonder I
became a born dollar bear! I suspect that this time we will end
up with the real thing again. The arguments are piling up.
Starting with the latest G7 statement where the G7 members
chose to focus almost solely on the global imbalances and the
subsequent need for a weaker dollar primarily against the
Asian currencies. Next but not least the statement from Mr.
Bernanke that the imbalance situation could pressure the dollar.
Mr. Snow's advice to re-read the G7 statement should the
market participants not understand their message. Statements
from the US Treasury that fx-pricing best be left to the markets
and that physical or verbal intervention was to be abandoned
and pricing left to the market. To me, that all leads to one thing -
namely a weaker dollar. In the spring of 1985 the dollar started
sliding, which was further fuelled in the fall when the Plaza
Accord (edited at the G7 meeting in Paris at the Plaza) was
sprung upon the market and followed by decisive centralbank
intervention. Compared to current account deficit at that time
(3%) today's deficit is monstrous. Add to that the fact that
Reagan's economic adviser Martin Feldstein (head of NBER
today) is doing the rounds in the US today, advocating the
imminent need for a much weaker dollar. The Americans are
turning tough on the dollar - we better listen and act
check out that new target!!
Friday tensions on the fx-market rose for real. Not only the
dollar went into another downward spiral, but the dollar
troubles did as feared spread as a contagious virus to the EMcomplex.
Especially the TRY and the ZAR (both known as "bad
guys" on a current account scale with deficits of 6.3% and 4.6%
respectively) took a serious beating, as EUR/TRY rose
dramatically from the 173 level to a temporary top around 185,
and USD/ZAR took off to the skies. A definite break of 185 in
EUR/TRY will open up for new unchartered high territories
above 193, and as USD/ZAR is concerned a break of 640 will
open up for a revisit with at least 680. What we are witnessing
now on especially the EM-complex currencies is a return of the
long gone risk aversion. All of a sudden market participants are
starting to wonder, if the received risk premiums - if any at all -
really do compensate them for the extra risks they are holding
in especially the EM-complex. The funding part of the fx- and
the EM-currency story in particular is also starting to hurt the
international investment community badly now. EUR/CHF is
coming crashing down through very good support areas at both
155.50 and 155.00 making CHF-funding less attractive due to
the strengthening CHF. The latest downmove in EUR/CHF has
in fact opened up for a revisit with 153.50, hence we have
decided to move our stop loss on our sold EUR/CHF position
to 155.50. Momentum trading is still the way to go in the
overall trending fx-market right now. The skyrocketing
EUR/USD has made me move the take profit area from 126 to
now 128 for 50% of my position. New target is now 136.70!
Jyskebanks comments out 30 mins ago
The NZD has been under immense pressure lately as the macro economic data from New Zealand has turned weaker. Overnight NZDUSD was hit by weak retail sales data but as the currency cross rate is currently testing the bottom of a falling trend channel a correction higher may be imminent thus we still prefer a neutral stance.
The CHF is currently balancing on the edge but so far 163.40 on EURCHF has provided a fair amount of resistance. We have chosen to maintain a selling recommendation on EURCHF at this point but if the above mentioned level gives in there could be potential for further CHF weakness in the short term.
interesting report on CB intervention positing the possibility of ECB moving to weaken the Euro......
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