EURUSD 1.1851 |
USDJPY 111.52 |
GBPUSD 1.3772 |
AUDUSD 0.7485 |
USDCAD 1.2406 |
GBPJPY 153.59 |
EURJPY 132.15 |
AUDJPY 83.48 |
CADJPY 89.86 |
Silver 26.23 |
Of Gold Extensions مقياس إمتدادات الذهب
Friday's $2431 high in gold consisted of a 21% rise from the Feb 14th low. Such percentage extensions from key lows or/and technical levels such as the 200-DMA, could flag crucial opportunities for partial/full profit-taking. Watch here.
Bitcoin versus Miners Performance
As many of you know 2023 was kind to members of our WhatsApp Broadcast Group who snapped up shares in bitcoin miners, while 2024 has so far been more superior to Bitcoin than most of the miners...
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Is it not clear that dollar is going past 100 and this is going to stoke inflation in US and eurozone.
Clearly, the ECB will be raising intrest rates before the end of the summer. Euro is a hard currency - look at the price stability of the eurozone. At some point of time, the falling dollar will create panic and many will be burnt - including several punters out here. Can any of you "seriuos" traders mention how much money u made shorteing the euro or dollar? thousand bucks?? this shows from the quality of comments that appear from most of the people in this site now.
I have read Ashraf's book and in he did make good sense over commodities, china and the strateic shift in reserves. But now I think he is geting too much carried away on short term direction of the dollar and has lost sense of the US deficits, inflation thats coming up and growing influence of Indo china.
It would be great to see some serious comments on this website. Mostly what I see is jobless day traders losing their savings while making nickels and dimes in 100 pip moves.
Where s the big picture?
great call for the Euro - u picked up the downtrend in the 1.48 area I think.
I checked your commentary for eurodollar in march 09, and also in dec 08. Spot on - u picked up the trends for dollar weakness. also in the summer last year, when the euro was around 1.35, u placed a year end 09 target of 1.57. All these r great calls.
now, for the current weakeneing of the euro - i think the underlying issue is more the strength of the US recovery than the greece issue. Monthly unemployment numbers r turning positive as well as strong gdp numbers in the US. whether it is the stimulus or inventory rebuild, there is tracktion in the US. On the other hand Euro at 1.50 was stalling the Euro recovery. Also, there was not as much a stimulus in eurozone as was in US.
Going forward, what can turn the dollar down?
would it be slowdown - double dip recession for US? would it be sharp rise in long term rates triggered by weakening treasury sales? or would it be the fed tightening too early or would it be the US housing correcting further. I have no idea - perhaps none would occur.
But this is clear to me that large budget deficits in the US are not sustainable.
Also, china and india have taken jobs permanently out of the US. there r no new innovation cycles where the US is on the leading edge and this ultimately will lead to decline in real purchasing power of the average american. on top of this, the socializing of healthcare will add further drag.
So, personally, I do not see how a sustainable recovery out of the US will emerge.
I have only 10% of my assets in dollar - all else in euro.
I have lived five years in US and five years in europe. I do see some impact of india - china - globalization in europe but it is not as huge as US. 80% of walmart products are coming out of china and walmart sells maybe 350 billion$ of stuff in US.
France, germany, holland, finland are competitve even at euro 1.5. meanwhile, spain, italy, greece become somewhat competitive at euro 1.20 or much more at euro parity to dollar. a weakeinng euro is automatically going to improve the regional economy.
Europe is not america. bikering between 25 countries is normal. this is how europeons r. this is what americans do not understand - how can diversity work? americans just think in one way and they think the whole world works like that - this is specially true of the american economists who r calling for the breakup of the euro these days. this is actually quite silly.
If greece had its own currency, what would happen? like UK its currency would go down. well, the euro is going down - and that is sufficient to trigger growth in the long term.
Why is going to the IMF such a big deal? IMF will come in and give money at 3% at the same time putting harsh terms to cut the deficit. this is what greece needs. in the long term, this is a better solution than germans or the french paying for greek retirement.
so, overall, i am comfortable holding the euro. i would love to hold the renminbi but its not available. i am still not convinced for the dollar. actually looking at all this, it makes sense that gold should be going to 2000 or 5000 in the next few years.
good work -
though i am not sure why u provide this free service
j
I have cash only positions in the Euro - no leverage for now.
For a trading position, I would have shorted when net Euro short positions emergered and would have coverage last week when the short postions were cut in half.
200 MA breaks and dead cross are fine with me. Short term trading with 10x leverage would have double the positions in the last couple of months.
However, for me, short term trading results in a net loss over a long term. I rather prefer to follow a short term trend that is in the direction of long term fundamentals.
I mentinoed this earlier. US is improving and Eurozone is lagging by lets say few months.
A US economy growth along with EU is Euro positive and also a US slowdown and Euro zone growth is Euro positive.
Buying the Euro now is actually a great opportunity.
Greece loan will be addressed via IMF or might be a combination of Euro guarentees and ECB loan mechanism etc. This will show up in the next couple of weeks. For now, softening of the Euro is good for Germany and France and they would like to delay the Greek life line as long as they can.
The only negative I would consider for Greece would be the fall of the government and new elections. That would delay the cuts and IMF etc support resulting in more uncertainity for the Euro.
However, I give it max two weeks and the you will see the Greek CDSs going and the Euro recovering above 1.42.
any comments on the fundamentals fron your side would be greatly appreciates - as always
j
EURUSD is now hovering around 1.41. I am still long Euro. :-)
On a fundamental basis, US economy and Eurozone should also catch up in the next couple of quarters.
One major difference from summer 2008 is that US economy was suffering and Eurozone economy went south resulting in ECB rate cuts and Euro losses. In the current environment, the US economy is improving the and the Eurozone is catching up. this is similar to 2005 Euro losses and eventual Euro recovery.
By mid summer, US and Eurozone recovery should firm up resulting in Euro gains towards 1.5+.
The current sovereign debt issues related to Greece etc are transitionary. Consider this - ECB, Fed, BoE have pumped trillions in the market. and how much greek debt is due this year? 52 billion? thats it? Even a case like Iceland has been resolved, Greece should not be a big issue.
Greek debt is in Euros - not like South american debt crisis of the eighties or Russian default of the nineties. The debt is in local currency and the current maturity is not not so significant. However, bad mounthing the euro zone issues is actually beneficial to germany / france etc as it is leading to a weaker euro - so there is much talk about it.
So, short term, I give up - Euro is in a dead cross and all that, but on a fundamental and cyclical recovery basis, Euro will regain 1.50 within next few months.
happy trading,
j
Long Euro ...
On a technical basis, Ashraf and all are correct
on a macro basis, Euro will recover
oveall, the matrix seems to be
1) US slow down + Euro slow down ==> Dollar appreciates due to risk apetite
2) US growth + Euro slow down ==> Dollar appreciates due to yield differential and rising rates
3) US growth + Euro growth ==> Euro appreciates due to risk appetite increase
4) US slow down + Euro growth ==> Euro rises due to rising rate expectations
The current fall of the Euro is due to 2).
However, the transition to 3) this year and then 4) next year will happen
Note that despite heavily Euro shorting since Dec 4, the Euro is holding above 1.42. Whats holding it? depsite every one clamouring for a Euro correction?
The fundametals for Euro rise are in place, and the Euro fall for the last few weeks is just pressure by technicals... lets see if Ashraf's 1.38 comes by end of Q1 or a if Euro moves above 1.45 - my guess
br,
jamshed
why? ECB does not have a growth target.....only inflation
slowly moving up guys.............
euro is a buying opportunity...
Euro short contracts reduced by 15000 last week. lets see if there is more or less net shorts by this friday
i do not see a US rate increase this year since it will kill the housing recovery.....
good luck to the euro shorts..... i am long
I am in a learning mode and you book has been quite helpful along with your commentary here.
my simplistic view is that dollar would appreciate when a flood of foreign money moves into the US. this i do not see happening due to structural problems in the US economy - mainly permanent job losses that have moved work over to china and india leaving middle class americans to work at walmart. unless there is a huge new industry developing out of the US in renewables or health care etc, the US economy will fail to fully recover from the housing crisis.
short term, i give most value to cftc weekly long short positions and these are short euro by 6.5 B$ / around 36000 contracts. But i think this will shrink this week after the recent jobs report.
where do u you see the euro dollar in 3 months and 12 months? i think u mentioned 1.38 for 3 months........what about 12 months?
from different sources like scotia / danske / mellon, i would think it would be around 1.50 in three months and maybe 1.40 in a year time.
all of us here appreciate your free commentory by the way........
j
I disagree with your positioning for Euro dollar.
With the 4 dec jobs report, the bias and the yield differential shifted in favor of the dollar. now with the 8 jan jobs report, the euro should benefit and the US 10 year yield should come down - and more so with a weak inflation number if that comes. So, positioning should go towards dollar short.
you were quick to adjust to the change in fundamentals reflected by 4 dec jobs report. Otherwise, you had a year end Eurdollar target of 1.57. However, now you are suggesting 1.38. Fair enough on technicals but does not look like the macro is supporting it.
perhaps u r few days late in adjusting to the significance of the 8 jan jobs report?
the US deficit is here to stay and so is the weak recovery. The fed should have no options but to continue with low interest rates for a long time. Bernanke would not do the Japanese mistake of nineties.
j
Interesting article. http://www.bloomberg.com/apps/news?pid=20601083&sid=aH.TYqDk6weU
Ashraf,
could you suggest end of 2010 target for EURUSD and USDJPY?
I think the weakening of the USD is clear. However, a high Euro and Yen does not appear to be sustainable (above 1.6 and 80). High Euro should cause a double dip recession and the Yen should result in intervention. A weak Dollar, on the other hand, fits for the US growth picture.
What is your opinion for 2010 end?
br,
jamshed