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EURUSD Free-Falling

Tyler Durden's picture


EURUSD just traded under1.2150, down over 130 pips on the day. The question is - will wee see the ubiquitous rip-roaring reversion rally into the European close again? Rather notably this is as big a liquidity/break-up premium to its swap-spread-implied fair-value as we have seen since the peak of the crisis in mid November last year!



and the premium to swap-spread-based fair indicates a great a concern over break up as we have seen since the peak of the crisis last fall...

Chart: Bloomberg


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Fri, 07/20/2012 - 10:01 | 2635831 LawsofPhysics
LawsofPhysics's picture

Fucking awsome, bloody muppets.   Will we see reversion?  Is the pope Catholic?

Fri, 07/20/2012 - 10:02 | 2635849 GetZeeGold
GetZeeGold's picture



Thought the last bailout fixed that.......huh?


Guess not.


Fri, 07/20/2012 - 10:04 | 2635868 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

King Dollar!

Fri, 07/20/2012 - 10:08 | 2635893 Peter K
Peter K's picture

And energy independant within 5 years to boot :))))))))))))))))))))))

Fri, 07/20/2012 - 10:16 | 2635934 I think I need ...
I think I need to buy a gun's picture

bernanke said on wednesday he had news clippings  from 2008 and 2009 about how wrong they all were regarding the collapse of the dollar,,,,,,,run for your lives

Fri, 07/20/2012 - 10:18 | 2635944 spastic_colon
spastic_colon's picture

will we see reversion....haha...thats so cute.....ofcourse we will, currency markets influence more than just currency markets silly

Fri, 07/20/2012 - 10:24 | 2635976 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yes the dollar smells just as shitty as the euro; it is all fiat and done by decree.  Nothing but IOUs this system is.  DO away with this system:

Buy Silver!

That which has no counter party risk!  That which keeps its molecular structure and stores its wealth, however its wealth is determined!  Take the money supply back!


Fri, 07/20/2012 - 10:40 | 2636039 j0nx
j0nx's picture

Anyone who bought silver in the past year has had their asses HANDED to them. Buying it for TEOTWAWKI is one thing but buying it as an investment is a poor choice. Junk away.

Fri, 07/20/2012 - 10:44 | 2636067 Nussi34
Nussi34's picture

They should have called it Icarus, not Euro.

Fri, 07/20/2012 - 10:47 | 2636086 ParkAveFlasher
ParkAveFlasher's picture

Anyone else notice a slight decoupling of silver from gold this morn?  They normally chart in tandem.

Fri, 07/20/2012 - 10:50 | 2636097 fuu
fuu's picture

"one thing but buying it as an investment"

Hahahaha, good one.

Fri, 07/20/2012 - 10:55 | 2636099 Think for yourself
Think for yourself's picture

I don't know - I bought 40 oz of silver over the last year - price average, premium included, 33$ per - and I still have exactly 40 oz. It feels like a rather stable vehicle, doesn't it?

Your problem is that you think of silver as a speculative investment - but those who do understand silver see it as a safe storage vehicle for accumulated wealth. These are 2 very different purposes which by definition are polar opposites of each other.

Fri, 07/20/2012 - 17:01 | 2637744 j0nx
j0nx's picture

Negative ghost rider. I bought it for end of the world and trading purposes if shit breaks down along with lots of ammo. As an investment not so much. That's my point. As an investment it is not a sound choice.

Fri, 07/20/2012 - 11:03 | 2636154 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buy low......

Fri, 07/20/2012 - 11:17 | 2636218 Think for yourself
Think for yourself's picture

... and don't sell (unless if you really fucking need to)

Fri, 07/20/2012 - 10:41 | 2636051 CrashisOptimistic
CrashisOptimistic's picture

FYI Saudi Arabia's domestic oil consumption has doubled in the past decade.  It is rising exponentially.

Countries may become oil independent in a way they may not prefer.  If there are no oil exports to buy, then you are independent.

Fri, 07/20/2012 - 10:06 | 2635878 Dr. Richard Head
Dr. Richard Head's picture

In light of the Olympics, I would like to introduce a new event - Can Kicking.  We have already seen the exposition phase ofthis event introduction, so to bring it into the fold of the golbalist games is the logical next step.

I can see it now, audience members cheering on their respective central bank and their can kicking ability.  The good thing is that no amount of dexterity is needed, as old white men have been can kicking for a good forty years now.

Fri, 07/20/2012 - 10:12 | 2635913 LawsofPhysics
LawsofPhysics's picture

I like it.  My only suggestion;

All bankers and government monetary "experts" are forced to play, the losers are publicly executed by guillotine.

Fri, 07/20/2012 - 10:12 | 2635916 Dr. Richard Head
Dr. Richard Head's picture

GAME ON!!!!!

Fri, 07/20/2012 - 10:17 | 2635941 HoofHearted
HoofHearted's picture

And the winners probably need a tar and feather treatment too.

Fri, 07/20/2012 - 10:19 | 2635947 fuu
fuu's picture

Can we dip the top three in molten gold, silver, and bronze?

Fri, 07/20/2012 - 10:40 | 2636042 Dr. Richard Head
Dr. Richard Head's picture

If I could up arrow more than onece I would.

Fri, 07/20/2012 - 10:22 | 2635959 JenkinsLane
JenkinsLane's picture

I think there should be something "Hunger Games-esque" for the losers instead of just the plain ole' Frenchie - something to keep the kids interested like.

Fri, 07/20/2012 - 10:43 | 2636065 Carl Spackler
Carl Spackler's picture

How about another introductory sport for the London Olympics?

   Cliff diving


Fri, 07/20/2012 - 10:54 | 2636115 yabyum
yabyum's picture

Can kicking? No one can bend it like Bernanke!

Fri, 07/20/2012 - 13:50 | 2636928 PoorByChoice
PoorByChoice's picture


Fri, 07/20/2012 - 11:04 | 2636163 JamesBond
JamesBond's picture

Same thing -

Our politicians own the real world record.



Fri, 07/20/2012 - 10:00 | 2635833 ThunderingTurd
ThunderingTurd's picture

Yes. Groundhog Day...

Fri, 07/20/2012 - 10:00 | 2635834 ZeroPower
ZeroPower's picture

Like clockwork, London session handing it over to NY session, a few more dips, and then an EOD rip to burn the sheep shorting under 1.214s

Fri, 07/20/2012 - 10:05 | 2635872 Yen Cross
Yen Cross's picture

The best they will get today, is a 38.2% retrace.

Fri, 07/20/2012 - 10:01 | 2635835 AccreditedEYE
AccreditedEYE's picture

Answer: Most likely.

Fri, 07/20/2012 - 10:01 | 2635836 Sofa King
Sofa King's picture

Selling off to cover those Chipotle losses...

Fri, 07/20/2012 - 10:07 | 2635884 Dr. Richard Head
Dr. Richard Head's picture

Chipotle loses bring on visions of diarrhea.

Fri, 07/20/2012 - 11:08 | 2636181 Lohn Jocke
Lohn Jocke's picture

Have you tried Chipotleaway? It gets the bloodstains out of your underwear.

Fri, 07/20/2012 - 10:01 | 2635842 Yen Cross
Yen Cross's picture

 eur/aud gives new definition to beating someone while they are down!

Fri, 07/20/2012 - 10:01 | 2635844 Itch
Itch's picture

Somehow i think that wont happen today.

Fri, 07/20/2012 - 10:05 | 2635871 Itch
Itch's picture

i.e swiss 10yr in 7.6% and Germany in 4.1%...til take a brave man to go all in now. Nothing wrong with scalping the bottom though.

Fri, 07/20/2012 - 10:03 | 2635855 buzzsaw99
buzzsaw99's picture

teh eurozone is on fiya!

Fri, 07/20/2012 - 10:05 | 2635873 Portugal
Portugal's picture

Reversion? We dont want it... from this side of the world. Its good for our exports... to you!

Keep paying the bills guys!

Kind regards from Europe

Fri, 07/20/2012 - 10:06 | 2635881 monopoly
monopoly's picture

And we are down less than .5%. Free markets. Right!

Fri, 07/20/2012 - 10:45 | 2636076 Carl Spackler
Carl Spackler's picture

Are you saying that ANOTHER rate is being manipulated by libor-ing bankers in Europe?

   I bet the Fed does nothing!

Fri, 07/20/2012 - 10:07 | 2635883 I Am Not a Copp...
I Am Not a Copper Top's picture

None of it matters.  We will probably close green on the day on no volume.

Fri, 07/20/2012 - 10:18 | 2635943 JenkinsLane
JenkinsLane's picture

Chin up son.

Fri, 07/20/2012 - 10:08 | 2635887 mark7
mark7's picture

Why would Spanish and Italians want to leave from eurozone when it is nicely providing a devaluation? Spanish export sectors hit the all time record this March. And Americans are once again shorting eur-usd aka shorting themselves until turning blue.

Fri, 07/20/2012 - 10:15 | 2635929 dpr10
dpr10's picture

you are being sarcastic right;;))if devaluation is such a good thing, why dont you exit;;))

Fri, 07/20/2012 - 10:21 | 2635950 mark7
mark7's picture

In the export sectors devaluation usually help a lot and in the US this euro devaluation makes even harder to close the trade deficit. Airbus vs. Boeing for example, who is going to win now more orders...Airbus.

Fri, 07/20/2012 - 12:23 | 2636486 Nobody For President
Nobody For President's picture

Uh - Airbus wingspar problems ain't gonna go away if the Euro devalues - there are quality/production/reliability issues and problems with the 370 that actually matter a hell of a lot more to purchasers than the value of the Euro on any given day or month.

aka "If it ain't Boeing, I ain't going."

Fri, 07/20/2012 - 12:57 | 2636671 mark7
mark7's picture

What a bunch of bullshit. That problem has been solved already.

Fri, 07/20/2012 - 10:08 | 2635888 CheapBastard
CheapBastard's picture

Strong dollar will pull us out of this great recession.



Fri, 07/20/2012 - 10:48 | 2635889 BlandJoe24
BlandJoe24's picture

Not saying this is how I want it to go, but today (lit tomorrow) is options expiration, so given the dominant short interest and the historical precedent, seems likely EURUSD and equities in general will shoot way up sometime today (to squeeze out the shorts).

Fri, 07/20/2012 - 10:10 | 2635892 Bubble
Bubble's picture

An agent of the Swiss Nat Bank selling I'm told

Fri, 07/20/2012 - 10:09 | 2635895 magpie
magpie's picture

Ugh, what's taking so long. Re-test the 1.20 already.

Fri, 07/20/2012 - 10:10 | 2635901 Quinvarius
Quinvarius's picture

Prepare for the intervention.

Fri, 07/20/2012 - 10:12 | 2635915 orangegeek
orangegeek's picture

The Euro is around 120, but well off its historical low in 2001 of around 80.   When all is said and done, the Euro should be worth less than it was in 2001.


And since the USD index is 58% weighted in the Euro, the USD is likely to rise over the long term.

Fri, 07/20/2012 - 10:37 | 2636031 Dan Conway
Dan Conway's picture

IMHO the fair value of the Euro is ZERO.  The fair value of the USD is double the euro.  Our turn on for going over the cliff will be after financial elites finish their orderly liquidation of the eurozone. 

Fri, 07/20/2012 - 10:13 | 2635918 RobotTrader
RobotTrader's picture

Peter Schiff must be puking up blood.


S & P 500 and U.S. Treasuries screaming to new record highs in Europe today.

Fri, 07/20/2012 - 10:23 | 2635962 Vincent Vega
Vincent Vega's picture

What no mention of LULU today. 80 to 56 in blood puking, blow torched record speed.

Fri, 07/20/2012 - 10:30 | 2635999 tmosley
tmosley's picture

No mention of Chipotle either.  

Classic projection.

Fri, 07/20/2012 - 12:35 | 2636572 Nobody For President
Nobody For President's picture

Hey Robo, how's yer CMG long position doing? Great call!

Fri, 07/20/2012 - 10:20 | 2635948 Jlmadyson
Jlmadyson's picture

Someone hurting badly for dollars. Never good.

Fri, 07/20/2012 - 10:22 | 2635960 Peter K
Peter K's picture

Actually, someone is pumping USD into Euroland. There may be panic in Italy and Spanish debt, but the rest of Euroland is not hitting the panic button just yet.

BTW, wonder if this has anything to do with the last G20 meeting. It's as if a back door USD funding facility was openned up to Euroland.

Fri, 07/20/2012 - 10:25 | 2635979 Quinvarius
Quinvarius's picture

No one is hurting for dollars.  This is too many dollars all jumping around and making bets.  Hyperinflation causes volatility--Especially in this leveraged freak show of a derivatives based market.  But some people need to see the solidification of real asset prices to understand real fear, the bursting of fraudulent inflationary reservoirs, and the endgame.  You will see it soon enough. 

Fri, 07/20/2012 - 11:17 | 2636221 Shizzmoney
Shizzmoney's picture

The only reason USD is stronger is b/c, as PIMCO put it, "It is the cleanest dirty shirt in the bin".

Fri, 07/20/2012 - 10:23 | 2635967 Ted Baker
Ted Baker's picture


Fri, 07/20/2012 - 10:27 | 2635985 Snakeeyes
Fri, 07/20/2012 - 10:31 | 2636001 mess nonster
mess nonster's picture

And I'm free, I'm free fallin'....
....I wanna free fall out into nothin'
Gonna leave this world for awhile

And I'm free, I'm free fallin'

Something about the guilt one feels that makes one do the same bad behavior again and again, to feel that bad feeling that feels so good, because the guilt has that piquant self-pity that lends itself so exquisitely to the fulfilment of one's deepest need for self-destruction...


Fri, 07/20/2012 - 10:35 | 2636021 adr
adr's picture

Oil is barely falling, stocks indexes are holding on.

I wonder where the stairstep algo will show up today?

Chipotle is only managing to fall to beginning of the year levels. It need to be cut in half from here to wipe out the two year QE momo insanity run the stock went on. $415 for a fucking burrito chain?

People will look back at this period and compare Chipotle, LULU, and the rest of the momo basket to

Fri, 07/20/2012 - 10:40 | 2636044 Dan Conway
Dan Conway's picture

don't forget CRM.  CRM's market cap was nearly double CMG's before today's CMG drop.  At least CMG makes money!  I can eat a burrito but I can't eat a cloud.  The only cloud that CRM is creating is the mushroom cloud when that finally crashes.

Fri, 07/20/2012 - 10:35 | 2636025 DeadFred
DeadFred's picture

Anybody who looked at the post yesterday could see the money to be made by playing those trends. Now that the cat's out of the bag and the dumb money can follow the trade the rules will be changed, count on it.

Fri, 07/20/2012 - 10:40 | 2636046 magpie
magpie's picture

There are some trades that can't even be frontrun by GS themselves.

Fri, 07/20/2012 - 11:00 | 2636109 BlandJoe24
BlandJoe24's picture

Assumption you're making is ZH posts are read/knowledge disseminated to enough of percentage of traders as to change trends overnight.  What evidence backs up this assumption?  Not fighting, just honestly curious...

Fri, 07/20/2012 - 10:37 | 2636033 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Free falling.

Have to love videos of videos. Music is fine.


Fri, 07/20/2012 - 10:49 | 2636095 Shizzmoney
Shizzmoney's picture

"Cause I'm free.............freefallin!!!!!111"

EURUSD signing Tom Petty at a karaoke bar.

Fri, 07/20/2012 - 10:58 | 2636136 Hetty Green
Hetty Green's picture

Somebody forgot to program the robots today.


Fri, 07/20/2012 - 11:11 | 2636191 BeetleBailey
BeetleBailey's picture

Shorted the EUR/USD @ 1.2240...stop at 1.2220 (douchebag buying dickhead profit stop).


Your welcome

Fri, 07/20/2012 - 14:56 | 2637240 JPM Hater001
JPM Hater001's picture


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