I don't have anything concrete I can point to but 1.50 EUR/USD almost feels as if someone has drawn a line in the sand. As more and more money piles into the trade without movement past that line you start to lose the mo-mo traders and the psychology can shift fast.The very next day we had "Goldman On The Dollar Carry Trade: "A 20% Reversal In Either 3 Months Or 3 Days" where we repeated the quote above.
If the buck were to turn and head back to say, 1.20, the results for equities and gold would be painful.
I'm just sayin'...
On November 25 the Euro hit it's high for 2009 and we posted "Dollar Sliding Into New Trading Range":
From MarketBeat:
The euro hit a fresh high for 2009 at $1.5144 as selloff in the greenback took another big jump in New York afternoon trading....Making this pronouncement from a week ago look a bit silly:
I don't have anything concrete I can point to but 1.50 EUR/USD almost feels as if someone has drawn a line in the sand. As more and more money piles into the trade without movement past that line you start to lose the mo-mo traders and the psychology can shift fast.It's either one of those "I may be in error but never in doubt" statements a rookie would never refer back to or it's a Maxwell Smart moment: "Missed it by thissss much".
If the buck were to turn and head back to say, 1.20, the results for equities and gold would be painful.
I'm just sayin'...
[or it's like spring '08 when you said $1.53 and we went to $1.59 in July -ed]
I'm leaning toward Humble Student of the Markets' interpretation:
As good market analysts know, when the public gets on board a story, chances are everyone is already in the trade and the trend is likely to reverse soon. So it is with interest that I got the following viral email entitled "What good is a Dollar?"
The answers: Make a penguin
Followed by "Dollar: not dead, just smells funny" (DXY)" on Dec. 2 at 1.5052 and "Euro Faces ‘Bearish Setup’ Against Dollar: Technical Analysis" on Dec. 9 at 1.4717, then "Technical Analysis: Euro Faces More Weakness" on Dec 17 at 1.4348.You get the idea. With investor bearishness on the US Dollar at an extreme reading, who is left to sell?
The point of all this is: If you get the big stuff right the rest is easy.
The fall off in gold, the sideways to down moves in stocks, churning in the oil markets all could be foreseen, if you got the currency move right.
Here's the latest, from Bloomberg:
The euro risks tumbling to $1.3405 should it close tomorrow below a weekly moving average, Commerzbank AG said, citing trading patterns.Euro-dollar is “sitting” on its 200-week moving average, said Karen Jones, head of fixed-income, commodity and currency technical analysis in London. The level is currently at $1.3859, according to prices on Bloomberg. A weekly close below this would be “extremely negative,” Jones said.
“That would likely trigger another leg lower,” Jones said today in an interview. The euro would “target initially $1.3735, en route to $1.3405,” she said.
The euro fell 0.7 percent to $1.3792 as of 3:12 p.m. in London, depreciating to less than $1.38 for the first time since June 16. It has dropped 3.7 percent versus the dollar this year....MORE
Pay attention and be careful you don't get stung:
Scorpion:
