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Nic Lenoir Takes Goldman Head On, Says Time To Sell EURUSD Is Here
From Nic Lenoir of ICAP
Not that many layups or exciting trades in the G10 out there with equities in a slow melt up and the long end in Fixed Income stuck in a range for the last month. If you missed out on the sell-off in metals or did not have the UK GDP data ahead of the market don't despair just yet, we have a very interesting set-up to sell EURUSD here.
We had the first EFSF auction yesterday and it priced in better than expected, with Japan taking down 20% of the issue (clearly they don't have enough debt of their own that they need to get some of that peripheral Europe action). As always leading into the auction PIIGS sovereign CDS contracted big time as the ECB and their Asian rescue team ramped up the market to boost spirits and shorts were squeezed into oblivion. Yet in the background the political picture in Ireland is deteriorating, and the structural flaws that are forcing the PIIGS into depression are still well in place. So is this another case of buy the rumor sell the news? If history is any guide, cycles between waves of panic are ever shorter during this type of crisis, and quick fixes end up being fade opportunities.
Technically the set-up is very interesting here. We stand below the 61.8% of the sell-off since the November highs, the hourly divergence is staggering also. I strongly favor shorts here. Less convinced traders traders can wait for the break of the trend support which comes around 1.3640. Given the recent advance I think we should see a retracement back to at least 1.34 even if we are to utlimately advance further. I am bearish EUR as I don't believe this currency has a place in this world anymore, but even raging bulls should be cautious here.
Good luck trading,
Nic
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SPX
http://99ercharts.blogspot.com/2011/01/spx_26.html
http://www.zerohedge.com/forum/99er-charts-0
Sell eur=sell stocks
Correct.
1.34 is definitely possible.
But there is nothing bearish about the EUR/USD chart at all.
From an Elliot perspective the structure is bearish . 5 waves down from the November high and a clear textbook 3 wave ABC correction from the January low ending at a Fib retracement , solid horizontal resistance and where wave A is equal to wave C .
ABC bottom 100% extension at the 1.3818 level and the DiNapoli overbought level coming in at 1.3835 looks like the logical topping point for me as they wash an rinse the weak shorts out of the game. Don't hide your stops just behind the 61.8% level, it's too obvious to everyone involved.
4x.
Looks like the EW crew are counting to fast as usual.... ;-)
Label the a-b-c pattern (w) The correction an (x) and now were going back up in a (y) which will give the higher 1.40's handle target.
... therefore, the actual structure is bullish.
True,
They seem to be missing the option, that their "clear" 3 wave a-b-c could also be 1,2,3,4 with an extend 5th, that give the appreance of a 3 wave pattern.
Nothing at all?
The RSI has been in decline for two days and the Accumulation/Distribution has also topped and is turning down.
I'm sure there's more.
me thinks we will see 1.50+ before the euro starts its way to 1.10
"I don't believe this currency has a place in this world anymore"-Epic. In the meantime...
I'm waiting for DXY to cleanly break above 78 before going short (which I'm looking forward to doing). I guess that would pretty well coincide with EUR/USD break below 1.3640.
PS: Intraday uptrend on the DXY 5 min chart just broke...(sigh)
combine this with SOTU and lighten up on EM for a lil IMO
Dow 12k hats available yet?.. LOL
The real eye in that storm is the CHF.
$ 1.36 for a basket of insolvent countries sounds reasonable ..no? where can one get in on this great deal.
Davos 12k party time...!
I thought you were referring to the 50 States for a second there.
12k
HOOKER BREATH!
Bloombrg with a Dow 12k Slot Machine! yes.. Official Mkt Top signal mechanism.
Davos Male Escorts are in High Demand...Bankers are in party Mode.
Someone junked you...looks like Geithner was cruising thru Zerohedge.
"I don't believe this currency has a place in this world anymore"
I dont agree. While the ECB sets the political agenda to prepare for european bonds to be issued;
It seems that when things get worse for the eur strategically it only provides more force for reforms, in favor of the ECB. Wouldnt bet on eurusd going down.
EUR is here to stay. Get used to it.
Good luck Nic, I think predicting eur/usd becouse: "I am bearish EUR as I don't believe this currency has a place in this world anymore" can be a very fast way to lose your money.
While euro is a fiat currency, so is dollar, therefore hard to see one surviving if other fails.
By the way, word for Portuguese for gold is " Ouro "...
better wait for the euro to hit 1.50 -1.55 these next months...then sell it hard
EURUSD 1.35 is my personal equilibrium.
Not too expensive for Europe to compete, not too cheap for the US to have a fighting chance in hell to realize some of that majic "innovation" BarakObamaMubarakBenAli was speaking about.
Egypt in chaos will mean that the Saudis are sweating bullets by now. Means that every oil trader in the world is starting to look at options.
Debt crisis here. Oil crisis next?
No doubt a rally in US$ selloff in Euro will coincide with rally in treasuries. Take a look at the set up of TLT @ http://rosenthalcapital.com/blog/
Thanks Nick as ever for your thoughts and insights.
Im short here 1.3685
SL - 1.3885
Target - 1.3365
When will you stop calling tops Nic?
the DXY never broke above the 78 mark I wanted as confirmation so I held off from shorting E/U. Then the Bernank spoke and fucked the USD right in the ass.
We're goin Zimbabwe, kids. Lets face it.
Nic, you may be correct in your assessment about the EURUSD short term, but it is NOT Goldman you are taking on, but instead, China.
It started with Greece and the Chinese, moved to Portugal and the Chinese, and next will be Spain and the Chinese...and a little later will be Italy's turn.
According to WGC figures from their latest Q4 2010 report, the Italians have a sizable amount of gold in reserves, and so do the Portuguese.