Why Did The Buck Sell Off This Week?

[jamarlin3]

: http://detachedtrader.com/


Richard Medley

WHY DID THE BUCK SELL OFF THIS WEEK?
Richard Medley former advisor to billione trader George Soros

1. Medley Report suggesting Fed stopping at 4.75 or 5% versus growing view OF 5.5%.
2. Japan JGB yields trading at multi-year highs Japan going in direction of higher rates.
3. Tame CPI report.
4. Market News International quoted unnamed sources as saying the European Central Bank may lift. rates ``to a neutral level'' that could be around 3.5 percent. The ECB raised rates on March 2 for the second time in three months to 2.5 percent
5. Hawkish ECB EU finance minister talk all week across the board in unison.
6. Yuan recently made its biggest one day gain since revaluation.
7. Growing US deficit problem.
8. Higher rates in Switzerl hike by SNB.
9. Geopolitical risks with Iran Iraq Al Queda in backdrop.
10. Good old fashion technical momentum "range fatigue".

Before the big Euro move today in which we booked a 61 pip profit we wrote yesterday in EURO/USD Closing Strong Long US CPI & Housing Starts SNB Rate Decision Tomorrow that:


Although volatility has been lacking in Euro/USD as range trading dominates led by short term spec accounts tomorrow has the potential to catch players off guard with a big move. With higher yields in Japan with JGB's trading at multi-year highsYuan appreciation (yesterday saw the Yuan appeciate the most in one day since revaluation) higher rates in Switzerl recent upside momentum in Euro developing hawkish comments ECB EU finance ministers across the board in unison talk of Fed stopping at 5% not 5.5% as some suggest the stars could be lining up to slaughter dollar bulls.

dollar bulls were indeed slaughtered today with blood losses dripping all across the market.

[tdeketel]

if you asked this former Soros advisor last week what the dollar would do this week he would have said "How the heck should I know what the market will do next?" ...

Most of the factors you mention were in place last week too but why didn't the dollar sell off last week or next week ? The market could have ignored this weeks' news stayed in the range. These explanations after everything has happened don't make me money. But hey commentators analists have to earn their living too I guess.

[Habib]

Right on tdketel.

These scum analysts always find some explaination after the fact.

[Gamma_Jammer]

Originally Posted by Habib

Right on tdketel.

These scum analysts always find some explaination after the fact.

A bit harsh I think ;-)

Just because the information doesn't filter down to the retail community in timely fashion doesn't mean it isn't out there. The yield differential picture is still the big story has manifest itself both in unwinding of carry trades also in terms of starting to see the bigger shops revise their forecasts. EUR being re-rated upwards for this year by the key players this week has definitely kept it bouyant towards the end of the week. But still think we need to see a decent $ downside breakout so confirm the story. As long as EUR/USD stays sub 1.25 it will still feel like noise I think

GJ

[davidjohny]

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David johny

[Pip Rippy]

What goes up - must come down! To be perfectly ht the more I think about it the worst my trading becomes. I am not smart enough to figure out the global currency game. I just switch long to short.

[ampris2000]

me too pip rippy.

i looked at fundamentals sometimes by going those i would make dumb trades.

i went back to just technical analysis i do fine.

it's still interesting to read the fundamentals sometimes but i learned not to make my decisions them.

[jamarlin3]

What are you talking about "after the fact"? There are many conditions in the market that will add up to a currency appreciating or depreciating. No one knows for sure the exact timing. This is not an exact science. I do know that on the detached traders website he made most of those points before the Euro run posted his Euro long trade in realtime. He also called the Yen move "before the fact" He did in fact make some people money on the Euro move. This was also "before the fact." I didn't follow his Euro long trade because I am a follower but his analysis made sense. Maybe rather than bashing his "why" you should study it see how these formulations developing could lead to another big move.

Some of you sound bitter because you didn't catch the move.