DislikedAnd as i said before if GU rise 10 pips and UJ drop the same 10 pips.... GY don't stay equal.... GY drop 9 pips.
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DislikedAnd as i said before if GU rise 10 pips and UJ drop the same 10 pips.... GY don't stay equal.... GY drop 9 pips.
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Dislikedhello SeekingLight! I was trading the 5 min charts of EJ, EU and GU, and believed that all three would go up based on a couple of moving averages. how did you make correct assessments of the directions of those pairs? what charts were you looking at? and what time frame?Ignored
QuoteDislikedI'm also learning to spot key levels to aid my trading. however I've noticed that most of the times price chop around those levels and by the time it really moved in earnest, I've lost my faith in those levels. how do you deal with this? and, how do you determine your key levels?
DislikedMany ppl around here are saying, "hmmm Europe and Britain depend on US economy so.. EJ and GY will respond to that"
But again... i gave the example of US 2002 recession. EJ is not falling in that period and by that times NFP were coming negative every month.
Stocks were declining, UJ was declining.... so... with the logic around EJ should had dropped with US problems back then.
But it didn't because Euro was rising like a beast back then. So, is not right to assume that everytime we see US problems the carries start to unwind.
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Quoting sgrigDislikedOk, I see what I mean. Sorry I misunderstood your original post.Ignored
DislikedOk, looking at 2002 charts, I have to agree with you that this is not always the case that US problems cause carry trade unwinding. Markets are never this simple, and conditions always change, so it is best not to overgeneralise. However in 2002, relative interest rates were also different, so maybe the perception of market events by carry traders was different from what it is now, although I may be completely mistaken.Ignored
DislikedYour question was "why did EUR/JPY drop during the NFP?" , or in other words yesterday.
Me and SeekingLight tried to explain what happened yesterday,
and i will use his words...
Even thought, you prefered to listen to other awnsers that look pretty but are a bit misleading if we consider all the situations..Ignored
QuoteDislikedI will try to explain again with simple words:
There are times when EJ is falling and carry trades are falling.
There are times when EJ is falling and carry trades are not falling.
Yesterday was one of the days where maybe the carry trades from US were falling but not the Euros and Pounds carry trades.
We know when Euro and Pounds carry trades are falling when EU and GU fall too or at least stall...
QuoteDislikedWhen i talked about pips i'm sorry if i didn't explain very well, but is very simple...
..when we look at GY for example and see all that volatility, we must think, "hey what an active pair, it must have a lot of ppl trading it"
however it is one of the less traded pairs in the majors group, do you believe it? Low volume!...
QuoteDislikedIn other words in forex the pairs value are not only determined by simple trading of it. They are bonded in correlations and GY for example is a product of the multiplication of GU with UJ
GU*UJ = GY
What i tried to explain is not the pip value or lots value or anything like that.
What i tryed to explain is that, since GY is more of a product of a multiplication than is own trading. Is correct to admit that one of the multiplicators will have a great impact on his value despite the trading and despite the Pound real value.
And as i said before if GU rise 10 pips and UJ drop the same 10 pips.... GY don't stay equal.... GY drop 9 pips.
QuoteDislikedA great example might be this. Look at Usd/Cad and look at Eur/Cad.
Everybody knows the reason of the Usd/Cad having a multi month bearish trend...
Price of oil rises, CAD values against the dollar since Canada is the 2 largest producer of oil and US imports from them.
However EurCad is also falling? Why? Because of the correlation... Because EU can't rise faster than US/Cad drops..
QuoteDislikedWhat i'm trying to say here is that, in your trading life... you will see lots and lots of times EJ and GY falling with US bad news, and is better for you to differentiate or else you will have lots of times in your mind that the panic is installed and is not, and that might afect your trading.
Many ppl around here are saying, "hmmm Europe and Britain depend on US economy so.. EJ and GY will respond to that"
But again... i gave the example of US 2002 recession. EJ is not falling in that period and by that times NFP were coming negative every month.
Stocks were declining, UJ was declining.... so... with the logic around EJ should had dropped with US problems back then.
But it didn't because Euro was rising like a beast back then. So, is not right to assume that everytime we see US problems the carries start to unwind
QuoteDislikedI hope you understand, i'm sorry if i criticized you in the beggining..
If you don't understand something i said be specific.
DislikedHi bluefox,
for longer term key levels and trendlines I use Monthly, Weekly, Daily charts.
MY opinion is - if you're trading on the 5M chart, then you're asking for
trouble.
Especially when beginning.
And I didn't make any assessment on EJ or UJ. It was unclear to me at the time so I stayed away. I could have sold an s/r break or retest of a broken TL which both GJ and UJ did, but since earlier attempts got killed I let it be.
I didn't realize until later that the daily had a very clear bearish setup formed (double high lower close + inside bar => broke downwards)
EURUSD had been making another interim bottom at 1.3550 with a Pin Bar or "Hammer" and then higher highs. So it was moving up. I use Price Action to trade, as seen in my signature.
The meaning / impact of moving averages decreases with the timeframe. Daily is pretty "big", 4h is meh and 1h is tricky. Anything below that is, er, pretty much jumping into the frying pan.
By looking for touches / reactions of price on the big timeframes. Check out posts on the James16 thread for examples.
You don't trade s/r alone. You trade a price setup on s/r / areas of confluence (fibs+s/r for example).
I really think you need to do a lot more reading and studying on some of the basics like trendlines, the meaning of s/r and s/r flipping and so on..
The stuff is out there, just takes some reading
Take care,
SeekingLightIgnored
Quoting bluefoxDislikedI was more interested in knowing how to predict this kind of event. and when accurate predictions are not possible, how to recognise the signs when things like this might happen.Ignored
Quoting bluefoxDislikedI don't understand this part very well. you said "Yesterday was one of the days where maybe the carry trades from US were falling but not the Euros and Pounds carry trades.", but EUR/JPY did drop a lot. is this a typo? or am I missing sth?Ignored
Quoting bluefoxDislikedI've been told that volume is not known for any particular currency pair, because there is no centralised exchang for forex. how do you determine the volume for this market?Ignored
Quoting bluefoxDislikedif this is indeed the case, how can one determine which multicator is the stronger one? for example, according to your theory, EUR/CHF = EUR/USD * USD/CHF, right? can I assume that in this case euro is the stronger multiplicator, since EUR/USD has been in an uptrend?Ignored
Quoting bluefoxDislikedok, I understand a bit more now. both euro and cad have been appreciating against the dollar. but because cad value is increasing faster and stronger, eur/cad drops, right? is this all to it? does the economic relationships between europe and canada play no role at all?Ignored
Quoting bluefoxDislikedok, I get your point. bad news does not necessarily mean the carry trades will fall. their directions depend more on the stronger multiplicator.Ignored
DislikedWhat if this EUR hike against the USD was created by the banks in the US, who actually sold a lot of USD and bought YEN?
After all there is no way for the feds to cut the interest rate, because with that they will destroy the whole country's economy. Remember it isn't only about the present, the future is far more important right now.
Fridays sell off of the USD I see it as a buble on the stock market. Simply untrue. Next week should go back where it was if not even futher down. Meaning strenghtening USD.
On the other hand if the US is going to play in a way to totally destroy its own economy which will weaken the USD, a lot, then the only way out is a war. Syria already shoots at Israely planes. Israel already threatens Iran of putting her down, which I don't know how the hell they are going to do without US help. Actually even the US will have to fight big and a lot against Iran. On the other hand if this war happens, it will be a big one involving all continents and most countries. Then I suggest, that all of us who make money off of Forex, look for something else out there to make money, cause I don't think Forex will be tradeble for other than banks again.
Alright, it was a joke, so don't get carried away yet.
But somehow I have a feeling that it wasn't the ECB who went against the USD on Friday. But rather it happened from inside the US. Banks have problems to fix, and those problems can be fixed only with lots of money. The Fed can't fix this problem for them, because with a rate cut would be only temporary. Besides with a rate cut stock could fall thousands of points because international investors would have no interest in investing or keeping their money in here. And that would bring the US into recession, big time. Right now the market will go pretty bad until one of the banks pups up as went into bankruptcy.
But hey I am not an economist. I might even be giberish here.
Regards...Ignored
DislikedThese explanations about the EURJPY dropping with a US weak economy may be partially accurate, but I do not see the corellation between that and the biggest drop in any currency that I can remember, 716 pips, 5 TIMES it's daily average.
The stock market has taken big hits before and NFP has given bad numbers before: still we've never seen anything like 9-4-08. There MUST be another or additional reason. I know BOJ intervenes at times...does anyone know how to confirm intervention?Ignored