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[FXGenius]

With extremely violent dollar bull run for long time without reasonable correction, I think that today's NFP will end the of dollar bull run, atleast for now, may be for a month or so.

From fundamental point of view trend reversal seem unlikely at this moment, due to strong US figures and weak UK and EU figures.

With banks' financial year closing by the end of June and early July, it seems that heavy profit taking may also help other currencies to recover from heavy losses and take a breath of relief.

[Nonpiker]

I think the euro will probably head higher into the close today as people square up into the weekend. I think next week the pair should trade through 1.1850. There are too many barrier options down there and large stops down to 1.1800 for the market not to go for them. Sterling may assist in a move lower as there will likely be emergency meetings in London regarding a immediate rate cut. That is just my humble opinion of course.

[psytrader]

My posts in the past have been pretty oppinionated; which is why Im in a bit of a tight spot agreeing with parts of both fxgenius and non piker.

Fundamentally fxgenius, you made one heck of a call on the nfp data already being priced in. Hmm,...the figure almost doubles and USD gets weaker. This is a bit too much too fast for any currency.

Non Piker, Im absolutely dying to know where you get your figures on options positions and where their stops are. In the mean time I think the technical pattern lends itself precicely to your position. I see a textbook double top on the GBP and EUR.

My opinion, (if I may be the first to use this phrase appropriately) is that we are in the "last throwes" of a USD bull run. The only thing I see extending it beyond another week is a rate cut in the UK. Without that, a continuation of this run beyond next friday is (I believe) unjustified.

Regards

PSY

[FXGenius]

Hmm ...... let's see how the next week unfolds itself.

[Nonpiker]

Originally Posted by psytrader

Non Piker, Im absolutely dying to know where you get your figures on options positions and where their stops are.

PSY

Psy,

It is just info passed along from various sales desks and friends at variety of institutions. The more sources you hear it from the better it tends to be...and I am hearing it from numerous sources.

[pqt]

Originally Posted by Nonpiker

I think the euro will probably head higher into the close today as people square up into the weekend. I think next week the pair should trade through 1.1850. There are too many barrier options down there and large stops down to 1.1800 for the market not to go for them. Sterling may assist in a move lower as there will likely be emergency meetings in London regarding a immediate rate cut. That is just my humble opinion of course.

May I ask why the market always tends to go after options barriers and stops?
It maybe evident for old pros but for us noobs, a good answer may help understand this strange beast better

[FXGenius]

End of the week COT (www.forextradersworld.com/cot/) data shows stronger dollar index and weaker cable and euro indexes, which indicates the run is not over yet.

[Nonpiker]

Originally Posted by pqt

May I ask why the market always tends to go after options barriers and stops?
It maybe evident for old pros but for us noobs, a good answer may help understand this strange beast better

PQT,
The writers of exotics, for example knockouts and no touches, typically have deeper pockets than the buyers. This largely due to the fact that these are desks of major financial institutions. They have inherent interest in forcing, in this case euro lower, since they will stand to collect premium from what they wrote without having to payout. Can this level be defended? Nothing is guaranteed and if it gets close and not through you will get a nasty squeeze higher as they are forced to cover.

In regards to the stops, one of the easiest ways for a bank trader to make money is to run stops. If there are large stops within reach they will begin selling a good deal before to get short. Other prop traders will smell the action and join in the party. Once the stops start going the eur dealers could sell more than they need and force it lower, where they will grab more than they need and get long. The market will most likely snap back and they will have booked a nice profit and will be long from lower levels.

I am not sure how good I explained that....

[pqt]

Originally Posted by Nonpiker

PQT,
The writers of exotics, for example knockouts and no touches, typically have deeper pockets than the buyers. This largely due to the fact that these are desks of major financial institutions. They have inherent interest in forcing, in this case euro lower, since they will stand to collect premium from what they wrote without having to payout. Can this level be defended? Nothing is guaranteed and if it gets close and not through you will get a nasty squeeze higher as they are forced to cover.

In regards to the stops, one of the easiest ways for a bank trader to make money is to run stops. If there are large stops within reach they will begin selling a good deal before to get short. Other prop traders will smell the action and join in the party. Once the stops start going the eur dealers could sell more than they need and force it lower, where they will grab more than they need and get long. The market will most likely snap back and they will have booked a nice profit and will be long from lower levels.

I am not sure how good I explained that....

Nonpiker, Thanks for the explanation. I get a better idea how it works now

[FXGenius]

Hi, what you guys now think about the future?

[fxintra32]

So are you saying the bank caused this rally, if so, that means it might be a good idea to be long of US dollar, because this is an artifical action by banks.

[psytrader]

Originally Posted by FXGenius

Hi, what you guys now think about the future?

Its comming.

Psy