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Euro In Free Fall: EURUSD Plunges To 1.2880, Goldman Stoking EURUSD Fire
The Euro is in free fall. And Goldman Sachs is not helping, as the firm reiterates it has a core short position on EURUSD. Alas, Goldman's 1.2880 support level was just taken out. Watch out below.
In classic FX fashion last weeks violent short squueze ahead of the weekend announcement of the rescue package just worked to trigger the extended move lower from Sunday nights 1.3365 high . With the 'good news' in the market and priced the euro remains vulnerable to any fresh cracks , further negative speculation or bad news flow and the risk lies firmly to the downside . Many will have missed this last and sharpest part of the move lower and it’s now a tough level to initiate shorts . We are still holding a core short because as uncomfortable as it may be to be short at these levels it is hard to know how far this move might extend and to square up is to potentially miss a move which could extend a good deal further . So we are staying short and would look to add should we retrace to 1.3025/50 . Good resistance should emerge at 1.3100 and a stop could be placed above the previous low on the year at 1.3114 . To the downside 1.2880/1.2900 should offer some support given option interest and tech objective . Last years low of 1.2457 is not beyond the realms of possibility , but one step at a time for now .
Good luck
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1.21-1.24 is my range. The ECB is not totally unhappy with this. It's starting to cut into our exports...
Germany happy about a decline in the euro?
That's not a question, it's a statement. The follow on is, of course.
Thrilled. They were pissed off at our Fed and its antics. So now the markets are forcing it down so they can export more to Asia. Hell, even the Russians are thrilled as the Ruble was right at 29 before rocketing back to 30. The only losers are at the Fed because they HAVE TO HAVE a devalued dollar to implicate economic growth. The USD index at 85 is not a good thing for the beanheads in DC.
Happy Cinco de Mayo!
Back and forth like a tennis match.
We must all remember that this is a series of competitive devaluations of currencies that will ebb and flow back and forth. The toilet is being flushed in slow motion and while short term there will be winners and losers, we know where this is going.
Germany's manufacturing sector is VERY political. A rising euro caused a ration of shit for the Krauts.
"Germany happy about a decline in the euro?"
"Unsere Exporte sind jetzt konkurrenzfähig!" shouted the Janet Yellen lookin' Merkel...
"Amerikaner hatten es nie so gut..."
Heidelberg SM 74cm's and VW Jetta's all around boys...
Was für Exporte, Bier und Porsches?
Printing presses are slowly becoming endangered species (like Spain and Portugal), thanks to the Google and the death of newspapers.
By the way, we don't want VWs in the good ole USA. We want Mercedes Benzes (like the AMG S63) and Porsches.
Cool. next week I can afford that beemer.
Sure- a Beemer put together by a Greek who is tempoarily taking a break from the excitement. Or an unhappuy German who does'nt give a shit anymore? I dunno - buy a subaru.
How about a beemer built in Spartanburg, SC?
Looks like its about time to nail down those European summer vacation plans that were out of the question last fall.
Why?
A little smell of European civil unrest in the morning...smells like victory.
Next Major support on the EURO is the lows of late 2008 to early 2009. 1.2460-1.2500. If it makes it through there, there's some support at 1.15. But I think it would make it past the 1.15 mark with no problem and test the 1:1 mark.
Brilliant accomplishment by the ECB. I mean to engineer a weaker Euro in the face of helicopter Ben's shenanigans - its not easy !
Moreover - in spite of the recent large move, the Euro is NOT that cheap - by historical range standards.
I was thinking the same thing. The WSJ was talking in March/10 that a fair value for the Euro was $1.18.
http://online.wsj.com/article/SB1000142405274870362530457511596015452306...
the euro is still overvalued, it should trade at 1,2-1,25 or so. I don't think that there are too many people unhappy with a weak(er) euro if oil doesn't get (much) more expensive. Mercedes has already said that they would build the C-Klasse in the dollar room (guess why) and Airbus was nearly panicking in early 2008 because airplanes are always paid in dollars.
Believe me, Benron Bernanke is VERY unhappy...
ok, that might be true. But others are :D
China sales soar for BMW, Daimler and Audi
http://blogs.ft.com/beyond-brics/2010/05/05/china-sales-soar-for-bmw-dai...
Economic parity is around 1.11, but it will only be a steal at half that...
Where do you think the major stops are set? I have a feeling there are a lot of large institutionals that are heavily dollar short right now. When will they get called in?
This is on very very thin trading. I've sat thru three markets today and the currencies have barely moved, only inched down. None of the fat cats are playing from the looks.
I'm staying out of it until I know EURUSD doesn't turn into a huge green candle in two hours, when they come up with the next 'bailout'. Not shorting the euro again, much as I want to, until I know for sure they aren't going to 'save' it. As a little fry I think I'll sit out until the bond market is open as usual.
I'm guessing the G20 have some emergency meeting, overhaul everything, force Greece to exit and default, same for some other countries, and come up with a 'new improved' euro made up of Germany and the northern countries. Anything but let the world dump all other currencies for all-in USD.
My point is that if they come up with an emergency rescue of some kind, which I think they will, then the euro could make an amazing resurrection - for awhile.
I'm really, really hoping this isn't Mad Max yet. I don't think China, Russia, or the Middle East are ready to take over the empire just yet.
It's ok. Just be sure and trade currencies using a 7 ip proxy and counterfeited money. Just like the big boys. LOL And call your mom (congress) if they try to force you to pay up.
Counterfeited money - check.
It's our little fiat $ trading account - I pretty much consider 'fiat' and 'counterfeit' as synonymous.
Just like the big boys - check.
Not committing to any particular 'investment' long term and concerned more with chart movement than 'fundamentals' - trading not investing. Easy to do since I don't feel confidence in any fiat currency anyway.
Ringing Mom (Congress) - oops.
I could try ringing overseas but I haven't bought my US Congress creature yet. Gotta finish paying off my Aussie MP first...is it too late? Who's the cheapest senator over there? I have...let's see...about $2.35 in my purse at the moment.
Damn. Well 2 out of 3 ain't bad...
Then that makes it -- 'fiat' and 'counterfiat'.
HA!!
Get yourself some usd/chf. Play it both ways.
heh...what the hell, eh, why not!
Sometimes I look over at the EURCHF chart, just for a snort and a giggle. The SNB got their work cut out with this little EUR downswing. :-)
Holy Mohammed. Its at 1.2803.
Are you allowed to say that here? Where's the <bleeeeep>? :-)
Congrats to all USD bears. You are now dead.
Short term, that is correct. Pull a 30 year chart up or follow Louise Yamada's works and you'll see why we're toast. We are still well inside the long term range.
If the dollar really does rise in real value, the US Gov't will be destroyed. Deflation kills the levered; that is an axiom.
All the banks and the sovereigns too will go tits up.
The problem with the 90 year trend charts is that they relied on credit growth. The only route for that going forward is for the USG to borrow geometrically more and the only lender who should lend to them is the Fed.
90 year charts don't work. You have to include the break from the gold standard in the 1970's and use that era as your starting base.
Just my opinion but long term charting after that period is much more accurate.
"Congrats to all USD bears. You are now dead."
Never Underestimate Bennie Bernank-ster
Never underestimate the Bernank-ster's ability to trade Wall Street crap for cash, buy up Timmay G's tide of bills and bonds and just drop pallets of cash for the fun of it... All because Bennie can...
Betting on the US dollar is like betting on the SEC to win... a legal case... not a pron downloading contest...
I agree. Against the parabolic deficits of the USG, I see nowhere but UP for the FRN.
This just gives the Green light for DblB to print baby print!
The concept of "Germany and Euro are happy due to the Euro devaluation" only lasts so long. Every currency (or major currency) competing for currency devaluation isn't a sound economic or financial policy. It sets the end game with "competitive devaluation", protectionism, "beggar-thy-neighbor" scenario and eventual defaults (as if we haven't had enough already). which isn't good for anyone.
While the Euro might have been somewhat overvalued compared to the U.S. Dollar, the speed of the decline of the Euro is a bit scary.
Good for Germany they are the only Eu Ctry that actually makes anything.
EU needs to keep the core and cutoff the malaka nations.
Its an adjustment, you didnt expectt some bumps along the way in this experiment? ha
Its going to par . 95-100. Brings the imbalances in a bit, ie inflated assets. Or they decide to scrap it. Not the most stable place politically or economically. Its one of the two.
Who would really be buying a Euro right now? I mean, only Bernanke is dumb enough to do it. If you go long Euro here, you have to be the biggest moron on the planet.
When was the last time we ran out of morons? Let me guess....
LOL
Seems to be an endless supply because there is.
Just remember that the morons are placed front and center for us to direct our anger towards. I want the heads of the puppet masters, not the puppets.
The people you think are puppet masters are not evil geniuses, but rather, evil morons.
ZH really needs a "gold" button next to the "junk" button ;)
....or maybe a "bitches" button...
I suggest a 'Kool-aid alert' button.
The rating agencies set Europe on fire for good reason. Ben is going to anounce QE2 right about Friday afternoon.
So, time coming to buy Euro and watch the default of California, collapse of commercial real estate market, burst of S&P bubble etc? =)
Is there any way the US can benefit from the demise of the euro? There must be something positive that can come from the strengthening of the dollar.
if you're wife gets hit by a car and goes into a coma,
she won't be able to catch you cheating....
US dollar has lost 97% of its value since 1913...(see BLS inflation calculator)
I suppose we could similarly shave the last 3% down over the next 100 years :0/
My Dear Friends,
Floor pricing targets 1.0835 to 1.0950.
Now you have the advantage.
Regards,
H