EUR

Regarding ECB rate hikes and withdrawal of non-standard measures, there are a couple of points I think should be stated

The ECB's primary mandate is price stability and when watching JCT on the monthly PC during the last months (say from Nov), it is clear that he personally feels very satisfied with the track record the ECB has achieved during his term in office. He will not risk this record during his final 6 months in office!

There is also the move towards making the individual countries responsible for providing their banks with cash. The Irish CB has increased their lending using a rule that allows them to create cash, subject to ECB approval. Spain has also gotten the message and are leaning heavily on their regional/local banks.

The ECB has also learned the lesson that if they make a problem go away from the headline news, politicians will treat it as if it was solved. I'm referring to the purchasing of peripheral bonds. There has been signals from the ECB that they want to unload the 70B or so of bonds from their balance sheet and indirect that there is a limit on how much the ECB can/will hold. The political camp has been mute on this aspect but instead transformed the ECB proposal that the ESFS should by the ECB holdings to one where the ESFS funds should be used to buy more bonds from the market (Lesson: never provide a "how" to a "what" since your "how" will be stolen to solve another "what".)

In sum, JCT & the ECB are moving towards a position that the situation is, or should be, normalizing and that the political camp is responsible for that to happen - it is a sort of a fait accompli play and a rather sharp move for a non-political body...

I realize that I'm really wading in deep here with this first post, but the aspects that I bring up have not been discussed much in this forum.

Subz

Thanks for your post with the sup/res on the Eur/Usd

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New pip
Not sure of all the why's on the euro but timing seems right for a 38.2% retracement of the move from 1.3426. Sold half my position at 1.3862. May not happen but holding the rest for a full 38%. I believe the interest rate hike threat could backfire on them but who knows when exactly?
Watching dollar gold and silver, not sure about euro gold. Should be watching that. Gold is not really down (nor it's sister silver) really. Just seeking some equilibrium after the run from 130?5. They're consolidating. Silver is affected by the U.S. stock markets and by gold. S&P 500 has also been in consolidation, triangular boundaries started at around 1340 and 1292. Getting tighter.

I remember from my youth hearing of China's old love affair for silver. I suspect, with inflation threats there is a rekindling of that affair. Increased demand in the world from a well deserved lack of trust in governments and central bankers is the real demand, and now greed. Quite a volatile mixture. Throw in some fear.

Not saying either will break out higher, though I do favor that notion. There are large numbers of amateurs also piling into silver simply because it's one of the things showing a strong move. I do not favor being in with them for very long periods. But hey! Just like the forex markets, there's more where those came from(sic). Personally I take a lot of advice in the Euro forum from folks like Subway and Ignore.

stupid but funny.... http://www.youtube.com/watch?v=F7PLMV3pWYI&feature=player_embedded