Is It Time to Jump Into Euro-Dollar?

I don’t think so!  The water is freezing and it’s blowing a gale.


Up until Thursday last week the euro looked fairly appalling.  Seven out of nine down weeks is not a good tally for euro optimist.  I was happy, as I am not one. 


However, Thursday and Friday have taken the pressure back off the euro and put it on the dollar. 


The euro ended in New York, close to the highs, and posted it strongest weekly performance since January. 


So is that it?  The euro is going to trundle along in a mindless pattern of consolidation around 1.3000.  A repeat of what we saw for much of 2012.


No! Not in my view! 


This year the market is trading on clear bearish sentiment.  A pause in the euro storm is not cause for celebration.   


Have you seen anything out of Europe that encourages you to invest in its currency?

I haven’t!  And I don’t expect much before the German elections later in the year. 


My strategy is to look for weakness 1.3015 and 1.3170.  Strong selling in this area would be a good signal that euro strength is just temporary. 

I think the dollar is good value in this area.

Brian Kiely 

Forex For Anyone

Views: 217

Comment by Romano on April 7, 2013 at 6:34pm

"Have you seen anything out of Europe that encourages you to invest in its currency? 

I think the dollar is good value in this area." 

Brian, its not that u would be wrong in thinking but u do kind of remind me Alan from sarrafx ;))

Just in case u havent noticed, market doesnt reflects fundamentals anymore for quite time. Were u said something like: "based on daily candles I doubt this was bottom", I would respect that analysis much more. 

And: "This year the market is trading on clear bearish sentiment." well... we painted higher high and lows so far on daily, recent downtrend wasnt very steep and resolute recently either, especially last weeks so I dunno... though I do think price should still go lower to better liquidity before rally. 

No offense, u know I love your posts, just saying....

best regards

Comment by Brian Kiely on April 7, 2013 at 9:38pm

Fair point, I did not want to make a list of Fundamentals that are hard to quantify.  However, the fact that US jobs data disappointed, and that the euro can only benefit from another currencies bad news is the point.  There have been no positive developments that make me believe that euro has been value since 1.3700.  Even now at 1.3000 I still believe it is not good value.   

Comment by Brian Kiely on April 7, 2013 at 11:17pm

I agree with you on a fair value.  However, I think it is overvalued here.  Volatility makes the FX world go round an there have been times in the past few years where it almost ground to a halt.  Thankfully this has changed.  I have never seen a currency at its fair value where the market was happy to leave it stay unchanged, events change constantly and that is what makes 2013 such a promising year. 

Comment by talisman on April 8, 2013 at 12:11am

@ peter-"Really though as long as it moves at least 150 - 300 pips up and down every week - it can keep doing that for the next 5 yrs as far as I am concerned  - although that's being selfish - but as a trader I am selfish  - otherwise I would just not survive in this jungle ;-))" hits the nail on the head.  key is to find a way to profit within the waves of volatility that is your time frame.  discussions of correct value, or where a pair is or isnt going is irrelevent if you cant frame trades effectively and then manage them for profit.

Comment by Romano on April 8, 2013 at 10:26am

Fundamentals are relative. US still have bigger deficit and that despite weak currency and printing already in progress. FED is monetizing while ECB is not and even what they did was backed with collateral. So we have market shorting euro against printing press, CBs who have (almost) unlimited power, against deleveraging in EU, against credit swaps and against US trade deficit. How does this fundamentally sounds good?

People seem to expect that euro will continually decline until one day it will lost all value and cease to exists. And that they will then close their (fundamentally based) shorts with huge bonus they made. It wont be that way, I suspect day before its collapse it will reach all time highs just to lure all fools so "they" can properly offload and exit. Or it will simply bounce on liquidity on daily basis until it stop one day. I a pretty sure that is what will happen, least of what any of us expect here. 

Thats why price went against Marius 1k+ pips despite his recent success(not that he care, but those who followed him sure did), and against Alan`s fundamental forecasts for this year that it will first go to 1.1x before rally. There is no problem going short on longer TF like daily or even weekly if charts are telling u so, but anyone who trade based on fundamental expectation should already wake up because since quite some time: THERE IS NO MARKET. (only excessive liquidity and bots)

Comment by Brian Kiely on April 8, 2013 at 3:25pm

I love passion... your are not short of that Romano.  Regards  Brian


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