Well EURUSD price action looks suspect to me lately and may not have conviction.. I am trying to figure out if the pairs strength has been from strength in the Yen against the USD and extreme weakness in the AUD... short term speculative EURJPY traders (likely short) taking profits right after the EURJPY drop, and EURAUD shorts getting blown out with aggressive short covering. Both these can generate enough volume to lift EURUSD!! The first bout of USDJPY weakness also pushed up AUDUSD last week.
Canadian big banks (BMO, RBC, CIBC, Scotia) openly put out their monthly forecasts. Anyone know which US/other banks that do so as well? Anyways here is the latest RBC FX forecast from today.
http://www.rbc.com/economics/market/pdf/fmm.pdf Confirms my longer term view that AUD is likely to stabilize or go down one more leg before stabilizing and recovering. As such EURAUD short not a bad trade especially with the yield differential and also Draghi may have to lower rates or ease further down the line.
Yen crosses havent moved much other than USD pairs. I'd have to think that during consolidation of the USD pairs, the JPY crosses will finally break down ahead of the S&P? EurJpy looks like the prime candidate!
When cnbc starts putting up headlines like thishttp://www.cnbc.com/id/100683015 you know you have to be careful... Buying Gold in Aussie terms is perhaps not a bad idea if you are from Australia.. Same for Canadians, buying gold in C$ terms??
USDCAD is tough to call right now but easier for me to judge against the other commodity pairs, especially NZD which is also at elevated highs against the AUD... AUDNZD as 1.21 ish now. I certainly expect AUDNZD to get back around 1.25 sometime. I've also been watching NZDCAD lately and my feeling is that in a risk off environment NZD is going to have to come off more than CAD.
Thanks Dave for your thoughts. I agree the US economy isnt improving but masked by other factors. I know you follow Mauldin as well and he had a link to this talk by Dr Hussman from hussmanfunds who lays out the current situation with great research and insights. Here is his talk...
http://www.youtube.com/watch?v=TYkCaUB1BQY
Price action in AUD and NZD has this eerie look of similarity to that of gold from earlier in the week. If the so called "deflation" trade is what justified the gold drop (which i dont fully agree with btw), then with AUD and NZD being among the most overvalued on PPP terms, I wouldnt be surprised by a 10% shakeout correction as well. I mean a ~2% yield differential doesnt justify holding on until after a blowout like with GLD. Any thoughts DaveO or others?
The Cyprus news makes the closing of the gap in EURUSD seem that much harder. I'd imagine a ton of sell orders being placed around the 1.3 level... Whatever happens tomorrow is going to be interesting!!
Thanks Dave for Mauldin reference which you posted last year and i began to research his thinking on the long supercycles brought on by debt. Mauldin references the work of Harvard's Rogoff and Reinhart and their book "This time is Different" which is also instructive to read (his talks are on youtube). Another line of thought which may interest you is by Richard Heinberg in his book "end of growth". It talks of fundamental limits to growth caused by the diminishing return on energy (as measured by energy out/in) which is what has powered real GDP growth in the last 200 years. low real growth means stocks should trade much lower, or the dollar needs to devalue. The bankers will try to pump the system but its going to fail and yes one day we will wake up and the bond market would have reacted badly!
Try publishing this in the UK weekend papers: Traders bet BankofEngland will raise rates to 6.25% --highest since 1… https://t.co/GWXrTEAk4R(11 months ago)
Poor start to a slow market day as Ezone PMIs disappoint. Im still keeping an eye on the rare (-2%) USD-GOLD combo,… https://t.co/UyRzWsRbs7(11 months ago)
-5% YTD is not good, while -7% from the year highs can be tough. Gold traders have their eyes fixated on this for n… https://t.co/NV5UMKsfNo(11 months ago)
ما وراء هبوط الدولار مع الذهب و من منهما يتمكن الارتداد؟
موعدنا الآن في غرفة شركة إكس أم لجلسة الأسواق
https://t.co/Y7tD0RxCS2
@XM_COM (11 months ago)
Jobless claims > 300k before next FOMC meeting would be ideal for Fed to make up for any CPI upside surprise (11 months ago)
"Cook & Eat at Home" scheme may come next to defeat UK inflation... (11 months ago)
Earlier in the week gold selloff was attributed to smaller than exp China EASING. Metal is now holding v well despi… https://t.co/ZW9cmXTPWW(11 months ago)
إستعمال تحليل الإنترماركت والتحليل الفني الكلاسيكي لتداول الذهب و الناسداك و السندات. شاهد هنا
Using intermarket technicals analysis to trade XAUUSD Nasdaq100 and Bonds.Watch here.
Latest Hot-Chart - May 16
Dax 200 DMA Deviation
You remember we went short Dax40 in late March based on the 13% 200 DMA extension, which gave us at least a 500-pt gain.
View Hot-Chart..
Confirms my longer term view that AUD is likely to stabilize or go down one more leg before stabilizing and recovering. As such EURAUD short not a bad trade especially with the yield differential and also Draghi may have to lower rates or ease further down the line.
Another line of thought which may interest you is by Richard Heinberg in his book "end of growth". It talks of fundamental limits to growth caused by the diminishing return on energy (as measured by energy out/in) which is what has powered real GDP growth in the last 200 years. low real growth means stocks should trade much lower, or the dollar needs to devalue. The bankers will try to pump the system but its going to fail and yes one day we will wake up and the bond market would have reacted badly!