Well the little cousin the FTSE looks to me to be about on its last gasp ... not that I would dare to sell it as that would probably be the cue for it to go up a few hundred points.
Yes, you don't have to get the full move, just take a nice chunk out of it. There is a saying - in trading and in other things, e.g. negotiation - "Leave something on the table for the other guy".
Having said that, when I close then see it moving further in my direction I am sometimes tempted to chase it. More often than not it's a bad idea. Something I still have to learn.
Ashraf's Twitter caution this afternoon not to chase cable after its 200 pip move down was a well-timed warning against this sort of thing.
@Asad: Thanks for China dumping report link. V. interesting. China won't be pushed around. Higher wages in China should increase costs for those who import from her, without the "benefit" (for the USA, for example), of a weaker USD; all pain, no gain. Not sure if that totally stands up economically, but anyway, as you say, it reminds us who holds the stick.
I found this link on another forum, and was going to post it here for another reason, but it is also slightly relevant to Xaron's post. It is a report from the Bank for International Settlements. Have a look at the chart on page 10 (it is a PDF): http://www.bis.org/publ/rpfxf07t.pdf?noframes=1
I had previously quoted from memory that EUR/USD and cable were much more traded than EUR/GPB, and thus I could not see that EUR/GBP could be used to manipulate EUR/USD or cable. Rather it is EUR/GBP that is the reed that blows one way or the other in the wind of the other two. I'll repeat the more significant ones here, this for 2007; the numbers are in percent share.
@Chloe: You aren't the only one with questions. It's a complicated financial world out there, and it can change so quickly. Like with this temporary EUR rally, apparently because of the recent political moves in Europe to rescue the weaker members. However, I see in that FT article that Ashraf pointed to:
"Weve had to face up to the fact that what is now a Greek problem could turn into a European one, the official said.
Were thinking about what we should do if the crisis spills from Greece into other euro countries. So its more about finding firewalls, containing the problem, than principally about helping the Greeks. He added there were no concrete plans as yet. " [A German government official, Germany being the dominant country in the Eurozone].
So it rather looks to me as though the market has overreacted a little, although as Ashraf says somewhere else, they will have to come up with something concrete at some point. Whether it will be enough to stop the Euro falling further again ....
Yes, always have to keep some powder dry (to borrow someone else's metaphore). Looks like I was wrong in my EUR/JPY shorts, although short from here might look better.
FWIW, I'm short both, on the grounds that both USD and JPY are the anti-risk-aversion currencies, and seem to play a similar role, even if not at the same time. Neither set of shorts is looking too clever at the moment, but I think this is a temporary pull-back. There is no EURO-positive news on the horizon that I can see ...
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قام الذهب باحترام نفس النموذج الشهري 8 مرات خلال آخر 17 سنة. شاهد الفيديو الكامل
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Having said that, when I close then see it moving further in my direction I am sometimes tempted to chase it. More often than not it's a bad idea. Something I still have to learn.
Ashraf's Twitter caution this afternoon not to chase cable after its 200 pip move down was a well-timed warning against this sort of thing.
http://www.bis.org/publ/rpfxf07t.pdf?noframes=1
I had previously quoted from memory that EUR/USD and cable were much more traded than EUR/GPB, and thus I could not see that EUR/GBP could be used to manipulate EUR/USD or cable. Rather it is EUR/GBP that is the reed that blows one way or the other in the wind of the other two. I'll repeat the more significant ones here, this for 2007; the numbers are in percent share.
EUR/USD 27
USD/JPY 13
USD/GBP 12
USD/AUD 6
USD/CHF 5
USD/CAD 4
EUR/JPY 2
EUR/GBP 2
EUR/CHF 2
In 2001, EUR/USD was 30 and USD/JPY was 20, so it changes over time. Since then, USD/SEK has come along, at 2% for example. (NOK not shown).
There is supposed to be another report due in 2010.
I myself am surprised that cable is less than half of EUR/USD.
"Weve had to face up to the fact that what is now a Greek problem could turn into a European one, the official said.
Were thinking about what we should do if the crisis spills from Greece into other euro countries. So its more about finding firewalls, containing the problem, than principally about helping the Greeks. He added there were no concrete plans as yet. " [A German government official, Germany being the dominant country in the Eurozone].
So it rather looks to me as though the market has overreacted a little, although as Ashraf says somewhere else, they will have to come up with something concrete at some point. Whether it will be enough to stop the Euro falling further again ....
Looks like I was wrong in my EUR/JPY shorts, although short from here might look better.
Neither set of shorts is looking too clever at the moment, but I think this is a temporary pull-back. There is no EURO-positive news on the horizon that I can see ...
Of course I could be wrong...