Thursday, January 13, 2011

That's Quite A Move in the EUR/USD

Great care advised for EUR/USD bears

Written by Sean Lee
January 13, 2011 at 23:59 GMT 
If you are a EUR/USD bear, then it might be a good time to take a few days off. There have been some big flows over the last 2 days and there is more to come. One player who has been very close to the action in recent days tells me that the short-covering has been frenetic and that there are more massive stops above 1.3410, 1.3440 and 1.3500. He says that if the present trend continues, we could be at 1.40 by the end of next week.
Certainly hard to imagine that but as we know once the market gets started in a particular direction with some momentum, it can be difficult to stop. Or as Jamie would say, the market can stay illogical longer than I can stay solvent.

Real money continues to buy EUR/USD

Written by Jamie Coleman
January 13, 2011 at 14:56 GMT 
And I have a feeling they will have more wood to chop at the 16:00 GMT fixing later this morning…
Right now, the market is focused on a 1.3350 digital, set to expire at 15:00 GMT.
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EUR/USD up large: What’s changed?

Written by Jamie Coleman
January 13, 2011 at 14:49 GMT 
Earlier this week, sovereign debt jitters gripped the markets. What’s changed?
Three successful auctions in Portugal Spain and Italy as well news that the European bailout fund will likely be increased…Japan said they would buy 20% of ESFS bonds and China said they would buy chunks as well…
Doesn’t change the macro picture that many EU countries have large, difficult to finance debt burdens (even Greece and Ireland, who’ve already been bailed out) very much but it is enough to change the imminent fear (hope?) of collapse…
Also Trichet’s inflation focus was a complete surprise to the market…
In the end, the market was very short Euros and got caught, but the news flow spurred the rethink…

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