Is it Warren Buffet or is it the FED?

[Habib]

Somebody big is definitely squeezing the GBP & Euro shorts.

[MickMason]

Isn't there some big options at/below 1.20? (Not sure of the significance but I heard it's well protected)

Then again it could just be a correction, or perhaps hedge funds looking to get out of their short dollars which they all seem to have been caught with, or maybe some profit taking......

Mick

[Habib]

There sure are huge option barriers at 1.2000 but this reversal is happening from much higher levels than that. May be they just want to make sure because option expiries are there for tomorrow (Wednesday), Friday and Monday as per fxcm news plug-in. So if they can protect a barrier like that, why is my frequent comment about presence of market manipulation so frowned upon by many on these forums?

[MickMason]

Originally Posted by Habib

So if they can protect a barrier like that, why is my frequent comment about presence of market manipulation so frowned upon by many on these forums?

It certainly shouldn't be frowned upon, this is one big game of strategy and manipulation by big players and governments, anyone who thinks otherwise is way too naive in my opinion. All we can do is try and follow in the wake and take a few crumbs from the master's table!


Mick

[Habib]

Thanks Mick.
Last time they did the same thing (Last Friday) they at least had CPI and TICS data to support them. What do they have today? All the news from the Euro land is BAD. Swedish 50-point rate cut shows how dire straits they are in.
I am convinced this manipulation will not hold foot much longer.

P.S.: EZ dilemma is to cut or not to cut. The economy is not gonna grow fast enough if they don't and the Euro will be in deeper doo doo if they do.

[pqt]

The sharks played their game and the suckers got slaughtered!

[MickMason]

Apparantly the move was the result of rumors about the yuan, traders longed Yen against the dollar. Who put that rumor about is a mystery but it obviously did what they wanted it to! That, together with comments from the ECB about a rate cut being a "crazy idea" (quote from Noyer) had traders covering their long dollar positions.

I agree with you Habib, I can't see this move is sustainable, another Fed hike next week is on the cards, most if not all dollar shorts will have been squared and here (or perhaps a bit higher to 1.2230/50) is a reasonable price to short, I think we'll see a serious attempt on 1.20. It will be nice to get out of this range we've been in, that's for sure.

As usual only time will tell.

Cheers

Mick

[Habib]

Looks like they finally realized they were losing more money defending the barriers than they made from the exotic option premiums.