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Citigroup Picks Up Where Goldman Ends: Tells Clients To Go Long EURUSD, i.e., Is Now Selling Its EUR Stash
A month ago Goldman told its clients to go long the EURUSD with a 1.35 stop. The stop was triggered within a week. Then the firm flipflopped and followed up with a diametrically opposite call. That call was also stopped within a few days. Goldman learned its lesson. But not Citi: the nationalized firm, whose stock, together with that of bankrupt Ambac, has just issued a long EURUSD call at 1.359. The call by technical analyst Aron Gera, proposes a stop at 1.349. In other words it is now Citi's turn to offload its EUR book. Gera's recommendation is based on technical analysis, which, in the form of momentum chasing, is all that seems to work these days. Aron thinks the EUR could surge to an 11-week high, even as the GBPUSD could jump as high as 1.5966 alongside EUR strength.
And while daily news out of Greece (loaded fire-extinguisher) and Germany (unloaded and unwilling gun) determine the EUR level more than any charts or patterns, an observation out of Citi we agree with is that for the U.S. dollar, the recent strength hasn’t come from it being
considered a strong alternative, just that there really is no other
alternative except for the yen or gold. It is well known how happy the BOJ is with rising rates... Soon, when the third lap of the F/X debasement race starts, we expect the rush out of all currencies to intensify, with commodities benefiting. The problem for the administration: once oil goes over $100 and rumblings of a mort revolt shake up the Capitol, the Fed will have no option but to hike. Which it can't. So we believe the market will be manipulated to leave oil in the $85-95 bbl range, and let the fiat outflow capital redirect primarily into gold.
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why do people listen to these bozo's ... I know they do.... it's like old people in Florida and the boiler room operations.....and the bozo's at the Fed want to talk about "rational" markets.
Short term, the euro is still oversold, but it won't begin the real recovery until well into the second half of the year.
Short-term momentum doesn't mean much if nonfeasance (i.e., a default) occurs.
There is no turning back at that point.
There so many ways that can bet go wrong. Now that the world economy is heading into depression levels, you have a real danger of war and rioting, and other social instabilities. Yeah, way too early to make that call.
( removed: double post)
They won't jump from the Euro to gold. In fact, traders will dump gold like mad.
The beneficiaries here will be first the yen and when that fails (2/2 carry traders...), then the flock will find the USD.
"In other words it is now Citi's turn to offload its EUR book."
Bingo.
Does this mean we won't be reading the phrases "flight to quality / safety" every time the buck goes up? Before I grind all the enamel off my teeth...
by 'clients' you mean they changed their algos?
Clients? If Citigroup has clients, I'm going long tomorrow!
Sorry. The Fed beat you to that trade!
it will go north but 1.349 is a stophunters stop.
Where can we get the recommendation of Goldman and Citi as you mentioned in the post?
Last 5 days have seen similar trading pattern, pump up euro in US afterhours, then europe comes in in their morning and sell the euro back down on any news out of PIIGUS. Euro is now officially being printed massively - make no mistake because all PIIGS would need same "non-concession" terms. Where else would Spain and Portugal or Italy would find the billions to lend to Greece, besides from the ECB's printing press?