summary
an uneventful press conference that was neither hawkish or dovish. Price seems to have sold off somewhat which i'll put down to traders seeing no movement in communication as dovish. To me however, there was an underlying consistent tone in the press conference and that is besides trade issues of which there was good news with Trump and Junker, the tone was continued progress, reduced risks, and an all round positive. Given that the $ has no fresh news and has been appreciating but becoming softer over the last 24 hours, i am opening up a long position in eurusd. I don't see any fresh news to drive the dollar further while not getting any dovish news from the ECB so by my calculation there is a potential for a relief rally post event.
an uneventful press conference that was neither hawkish or dovish. Price seems to have sold off somewhat which i'll put down to traders seeing no movement in communication as dovish. To me however, there was an underlying consistent tone in the press conference and that is besides trade issues of which there was good news with Trump and Junker, the tone was continued progress, reduced risks, and an all round positive. Given that the $ has no fresh news and has been appreciating but becoming softer over the last 24 hours, i am opening up a long position in eurusd. I don't see any fresh news to drive the dollar further while not getting any dovish news from the ECB so by my calculation there is a potential for a relief rally post event.
Just an FYI, I didn't make this clear on the previous post. This is not the usual trade I make. Its going to last several weeks as I feel there is a correction in usd as well as recognition that the eu is in a stronger position than current sentiment. My target is 1.9
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Atilla
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You mean 1.19?
It's a possibility but what with Fed rate hike talk and dovish continueum from EU it may do. I might get nervous around 1.18 which looks about middle ground for me.
Overall I do concur with FA though. Much better outlook for EU compared to US with Eastern trade routes soon to open up.
Hey bud
There are several factors at play with this decision. The Fed as you say are on a hiking cycle but it's been priced in now for the most part and there have been several streams from reputable sources that growth has peaked. Usd is essentially out of fresh fundamental drivers to continue the pace. Here is another interesting piece of evidence.
IMF: Staff estimates USD overvalued by 8% to 16% (a very recent headline)
Now pull up a 4 hour eurusd chart and see what's been going on. We had a steady appreciation of usd since mid April and then since the end of May we have ranged.
Back to the ecb today. Draghi is a dove and his story today wasn't dovish at all. The eu don't really want a stronger euro now but Draghi struggled to find anything negative to say. So we have a dove that's hawkish but a policy that's steady. Inflation just hit 2 percent and they are still negative rates. The US started raising rates a lot sooner so we have what I think is a turning point with the euro being undervalued and the usd over valued. The ecb will likely have to be more hawkish as inflation pulls ahead of their target and they are sitting with negative rates.
That's the plan and I reckon my target is on the conservative side.
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@Atilla
Looks like Morgan Stanley are in the same boat as me
https://www.bloomberg.com/news/arti...alls-dollar-peak-amid-wrong-bullish-consensus
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Looks like Morgan Stanley are in the same boat as me
https://www.bloomberg.com/news/arti...alls-dollar-peak-amid-wrong-bullish-consensus
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Atilla
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I would be talking out my @ss if I said i wasn't slightly concerned about todays US GDP number in context to my eurusd swing trade given the yellow submarine was barking on twitter like he knew something. So it came out worse than expected and i was looking for an expected number but this will do nicely. The trade is still on and in good shape and i have added another position to it. The problem i have now is i am forced to chuck some more cash into my account because of this b0llox leverage changes which is now preventing me from opening more positions. So will chuck some more at it and keep working this account until its like an Amsterdam red light window special all used and abused but flush with cash.
Some potential opportunities today including eu inflation and the first of 3 Gdp readings which is the most important. I have become increasingly hawkish on euro because I see negative rates and the pace of recovery and the timing of the next hike at odds with each other. The usa will likely enter recession in the next 2 years being at the end of its business cycle and the longest recovery on record. Interest rates are rising in the US and close to neutral rate. The rush to miss tariffs and also tax cuts has given the usa an edge case reading and it will likely pull back in future readings.
Cad Gdp, I am hawkish cad with the boc entering a rate hiking phase. A strong Gdp will further support their policy.
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Cad Gdp, I am hawkish cad with the boc entering a rate hiking phase. A strong Gdp will further support their policy.
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quick one - BOJ earlier today Kuroda
- He adds that they will ease policy more if necessary
-Says forward guidance means to keep rates extremely low for an extended period of time
with dollar being soft and my interest in euro relief rally + potential for accelerated growth i am looking to open a long on eurjpy @130.62 target is 131.14 and stop 130.35. stop will trail by 20 pips on this one
- He adds that they will ease policy more if necessary
-Says forward guidance means to keep rates extremely low for an extended period of time
with dollar being soft and my interest in euro relief rally + potential for accelerated growth i am looking to open a long on eurjpy @130.62 target is 131.14 and stop 130.35. stop will trail by 20 pips on this one
looks like the swing trade i abandoned due to broker changes might play out as i planned.
from forexlive analyst
- Bullish Euro chatter on the terminal hinting at a EUR/USD breakout coming.
- If inflation is seen as in tact, the thinking is that the ECB could wind back policy faster than is priced into the Euro. That would mean last week's post-ECB drop was overcooked and would be erased and then some. With EUR/USD at resistance, it might be poised to finally pop. Third time lucky...
If there is a breakout i will be moving my EJ target up 100 pips.
from forexlive analyst
- Bullish Euro chatter on the terminal hinting at a EUR/USD breakout coming.
- If inflation is seen as in tact, the thinking is that the ECB could wind back policy faster than is priced into the Euro. That would mean last week's post-ECB drop was overcooked and would be erased and then some. With EUR/USD at resistance, it might be poised to finally pop. Third time lucky...
If there is a breakout i will be moving my EJ target up 100 pips.
Canada GDP +0.5% vs +0.3% m/m expected, April GDP was +0.1% m/m.
Canada June industrial product price 0.5% vs +0.3% m/m expected. Prior was revised higher to 1.2% from 1.0% previously report.the largest upside contributor was motor vehicle recreational vehicles.
Best month since last May
April GDP was +0.1% m/m
GDP +2.6% y/y vs +2.3% expected
Prior y/y +2.5%
Details:
Goods producing +0.6%
Service producing +0.5%
Mining, quarrying, oil & gas +1.8% m/m and +6.4% y/y
Utilities -2.4%
Wholesale trade +1.4%
Retail trade +2.0%
Industrial production +0.5%
Supportive of the BOC rate hike policy and all round good news for the C$. A larger deviation would have been nice but i am looking to get into CADJPY off the back of this with Yen being the weakest on the day off the back of BOJ meeting earlier.
Canada June industrial product price 0.5% vs +0.3% m/m expected. Prior was revised higher to 1.2% from 1.0% previously report.the largest upside contributor was motor vehicle recreational vehicles.
Best month since last May
April GDP was +0.1% m/m
GDP +2.6% y/y vs +2.3% expected
Prior y/y +2.5%
Details:
Goods producing +0.6%
Service producing +0.5%
Mining, quarrying, oil & gas +1.8% m/m and +6.4% y/y
Utilities -2.4%
Wholesale trade +1.4%
Retail trade +2.0%
Industrial production +0.5%
Supportive of the BOC rate hike policy and all round good news for the C$. A larger deviation would have been nice but i am looking to get into CADJPY off the back of this with Yen being the weakest on the day off the back of BOJ meeting earlier.
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