Wednesday, January 18, 2012
more thoughts on the euro
Under normal circumstances i would be very leery of the,heavily advertised, trendline resistance level in euro at 128.70ish(in ech2 euro futures).Normally i would think the situation ripe for the "algo headfake" where the algos push it through the level, flush stops, tempt new longs, and then ram it down throat in the other direction..The reason i dont think that will happen this time is because of the crowded nature of the short euro trade...A violation of the 128.70 level(i would be more comfortable with a settle above 128.84) could set off a feverish"risk on" run that pushes equities higher and bond prices lower..The counter argument to that is losses in euro will force margin calls and actually be a "risk off" signal...Although i think that is an interesting point i think the perception of "risk on" will win...i do want to hear some counter points on this...
Subscribe to:
Post Comments (Atom)
Your technical analysis is "spot on" i am sure...you seem to know your fib rules...but i am of the belief that any euro trade is a risk on trade. the support that continues to keep the euro at the 120+ level is of a somewhat "shadow" nature. who is out there buying a currency that most of its largest member partners are bankrupt. the PIIGS cannot possibly pay their debt payments in the 10-20 year time frame. there must be "haircuts" of massive amounts of debt otherwise the eurozone, sans germany, is in for a "lost century" while the asian tigers & china dominate the globe and control more and more resources needed for growth, e.g. metals & materials.
ReplyDelete