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Presenting The Metronomic US-Open To EU-Close EURUSD Dip-And-Rip

Tyler Durden's picture





 

For the sixth day-in-a-row, a rather interesting price action has occurred in the most liquid FX pair in the world. Each day we see EURUSD crumble rapidly into the US day-session open, only to recover rapidly as the European market closes. These are not 10pip swings. These are 40-100pip gaps! What is going on? Its unclear for sure but we suspect some large entity is helping the market out with its dire need for European banks to repatriate their EUR to cover collateral and liquidity needs (remember we are seeing ECB margin calls rising and at these levels LCH will for sure be raising collateral on the very bonds that the most risky banks own). In other words, someone stomps on the USD bid (lowers the price of EURUSD) - which everyone loves as it correlates so highly with lower implied vol and higher stock prices - which gives the European banks a better (lower) rate of exchange to get out of their USD into the much needed EUR - and hence the flood comes in and we revert back to pre-day-session levels. Another conspiracy?

 

 

Charts: Bloomberg

 


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Thu, 07/19/2012 - 11:51 | Link to Comment Stack Trace
Stack Trace's picture

Dip & Rip .... DRIP!

Thu, 07/19/2012 - 12:10 | Link to Comment Chris Jusset
Chris Jusset's picture

Is there any market around that isn't completely manipulated?

Thu, 07/19/2012 - 12:20 | Link to Comment CH1
CH1's picture

Regulated = Manipulated on demand.

Been a lot of demand laterly.

Thu, 07/19/2012 - 13:02 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Watch the Naz. It's ripping higher.

 

It's always the most to lead, and the most to bleed, during masturbation & manipulation by the machinations.

Thu, 07/19/2012 - 12:27 | Link to Comment Stoploss
Stoploss's picture

Let the carpet bombing begin!

Thu, 07/19/2012 - 15:44 | Link to Comment Stoploss
Stoploss's picture

In all seriousness, it would appear that the fed buy's gold to kill the dollar to allow for the euro repat so as not to cause a commodity surge on top of geopol tensions.

It's a bit of a pattern.

BWTHDIK

Thu, 07/19/2012 - 13:18 | Link to Comment MillionDollarBoner_
MillionDollarBoner_'s picture

Look...Tyler...stop it already with the constant conspiracy theories!

This is the normal functioning of a healthy market, okay?!?

Thu, 07/19/2012 - 11:53 | Link to Comment Pretorian
Pretorian's picture

Thats how Goldman and gang were profitable every day of the Q? Pure skill no insider job as FED marionette. 

Thu, 07/19/2012 - 12:16 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

The sleuths at the CFTC are on it. They have penciled in an investigation to proceed, right after their conclusion to the investigation of the alleged rigging of the silver market. It all depends on their undercover guy, who they have stratigically inserted into a hot dog stand outside JPMs headquarters (satisfying the vigilance criteria of the regulators). He is also tasked with rummaging through the dumpster out the back to satisfy their regulatory duties of overseeing their balance sheets and compliance to code.   

Thu, 07/19/2012 - 11:59 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

 

 

These are not 10pip swings. These are 40-100pip gaps! What is going on?

Surely, technical analysis could answer this question.  Where is Art Cashin and his napkin? /sarc

 

Thu, 07/19/2012 - 11:54 | Link to Comment derek_vineyard
derek_vineyard's picture

the king has no clothes

Thu, 07/19/2012 - 12:21 | Link to Comment CH1
CH1's picture

the king has no clothes

And the peasants are assiduously looking away.

Thu, 07/19/2012 - 11:55 | Link to Comment The Axe
The Axe's picture

Tyler you are a genius    however  20 scandles later   equities at new highs     don;t you get tired?

Thu, 07/19/2012 - 12:03 | Link to Comment TrustWho
TrustWho's picture

...Did Hayek stop?

Thu, 07/19/2012 - 11:59 | Link to Comment Hype Alert
Hype Alert's picture

God's work.

Thu, 07/19/2012 - 12:03 | Link to Comment Bear
Bear's picture

There is nothing but bad news today and we are all green ... There are no positive fundamentals ... The only logic I can see is "Well its not going down with all the bad news, so it must be going to go up"

Thu, 07/19/2012 - 12:03 | Link to Comment ItsDanger
ItsDanger's picture

Yeah, I've noticed that pattern as well.  Refer to LIBOR angle.

Thu, 07/19/2012 - 12:06 | Link to Comment HD
HD's picture

Jesus it's just endless.

Thu, 07/19/2012 - 12:07 | Link to Comment Peter K
Peter K's picture

It's an easy 40-50 pips. Free money :)

Thu, 07/19/2012 - 12:09 | Link to Comment adr
adr's picture

That same pattern has been everywhere. Take a look at oil over the past few weeks, oil drops before the open, rips higher when the US opens and then rockets higher when Europe closes.

It could be that there is actually volume in Europe vs the same 40 algos bidding against each other in the US market.

I really wouldn't care if the Dow went to 30k if it weren't for the correlation that would send oil to $250 a barrel, corn to $15, nat gas to $25, and triple the cost of all the other things I need to survive.

Thu, 07/19/2012 - 12:10 | Link to Comment Peter K
Peter K's picture

And you got the Swiss selling billions and billions of Euro in their market support ops into this bid. Just gotta wonder who the sugar daddy is :)

Thu, 07/19/2012 - 12:11 | Link to Comment Zen Bernanke
Zen Bernanke's picture

trade along if you can.  it's there for the taking.

Thu, 07/19/2012 - 12:12 | Link to Comment JuicyGrabs
JuicyGrabs's picture

Smells like artificial price action. Someone is pumping the market. Fed proxies perhaps or European banks?

This is what the FED doesn`t want full audit, because it would reveal where they`re pumping money.

A friend from Hong Kong told me China  is doing same thing as US FED. Using big Chinese investment banks to prop up market as proxies. It`s going on wordwide.

Someone is trying hard to get Obama re-elected though I bet there`s a behind the scenes battle to prevent that from happening.

The upcoming fiscal cliff, a possible Iran war before November, further decay in Europe should bring market to its knees again. Now we`re in the midsts of mild summer euphoria when most businesses have put off the bad news to enjoy vacations. Calm before the storm.

Thu, 07/19/2012 - 12:28 | Link to Comment ZeroPower
ZeroPower's picture

This is the changeover from London to NY session in FX markets. Nothing new, meant to stop out the 300x leveraged Mrs. Watanabe's shorting with that darn strong Yen.

Thu, 07/19/2012 - 12:30 | Link to Comment yawara
yawara's picture

grip it and rip it!!!!

Thu, 07/19/2012 - 12:32 | Link to Comment Lord Koos
Lord Koos's picture

Yep I've noticed for some time that the Euro plunge protection team has been hard at work.  I mean, who else is buying the fucking Euro right now?

Thu, 07/19/2012 - 12:34 | Link to Comment Arkaenun
Arkaenun's picture

Buck Futter man. This shit is incessant. I think you just need to search for a market involving people that breath to find manipulation nowadays.

Thu, 07/19/2012 - 12:35 | Link to Comment killben
killben's picture

on sniffing did I smell something cooked by Bernanke, Geithner?

Thu, 07/19/2012 - 12:40 | Link to Comment Mario55
Mario55's picture

"In other words, someone stomps on the USD bid (lowers the price of EURUSD) - which everyone loves as it correlates so highly with lower implied vol and higher stock prices"....It looks to me it is the other way round, when EURUSD goes up, the stock prices do as well and vol goes down. Or am I wrong? 

Thu, 07/19/2012 - 12:43 | Link to Comment TooBearish
TooBearish's picture

Central Planning works!  BTFD!!! where are those cute little cartoons....

Thu, 07/19/2012 - 12:55 | Link to Comment Racer
Racer's picture

Banksters version: If it walks and quacks like a duck.... it's a cat

Thu, 07/19/2012 - 13:05 | Link to Comment digalert
digalert's picture

What's the big deal? It looks like a gold or silver chart...hee hee.

Thu, 07/19/2012 - 13:30 | Link to Comment Hunter S. Thompson
Hunter S. Thompson's picture

Even if we see a reversal there is no way that I can lose all that I have made on these various types of trades. Purely a gift from the Central Banks!

Thu, 07/19/2012 - 13:56 | Link to Comment magpie
magpie's picture

What has been a real-world effect of the Eurocrisis is that the GBP became a part of the risk on/off complex.

Thu, 07/19/2012 - 13:57 | Link to Comment debtor of last ...
debtor of last resort's picture

OT, not rigged: Urban Mining. Recovery of gold, copper, silver and other metals from mobile phones and other electronic equipment. On 6 o clock pm news in Holland. Look from 4:30 (Dutch) a nice industry in the Netherlands, trying to become a sort of "hub" for recycling pm's. For example: 300 kilo gold a year, for now. Not good for physical pm prices, but i think it will be a fast growing industry. 

http://www.uitzendinggemist.nl/afleveringen/1274682

Thu, 07/19/2012 - 13:56 | Link to Comment spartan speculation
spartan speculation's picture

Tyler   check into the dollar swaps the FED did with the ECB that keep getting renewed and extended. looks like they're buying dollars to pay off their swaps maybe using the weakness in eur/usd and the up move in risk on equities (s&p) to pay back large amounts of the swaps they entered. 

Thu, 07/19/2012 - 15:20 | Link to Comment Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

It looks similar to the silly swings of August last year. You know the ones, the volatility before the eur dropped over 2000pips.

Thu, 07/19/2012 - 16:18 | Link to Comment Random_Robert
Random_Robert's picture

What is so strange about this?

How many of you have watched the price of Gold exhibit simlar behavior going into the London PM fix, only to rebound later in the morning during New York trading? This has been going on for nearly 10 years...

In fact, if you were a Gold trader selling the London AM fix and buying the PM fix, your position would have out-paced the secular bull market in Gold 2200% to 600% since 2002

However, if you had bought the London AM Gold fix and sold the PM fix over the same time period, your position would now be down -70%

So, unless everyone buys Gold everywhere else, but only SELLS it in London, there is something unnatural occuring here.

The global bankers have unleashed the droid army against the free market.   Move along, move along...

It will take time for Adam Smith to be proven right, yet again, but it WILL happen.

Thu, 07/19/2012 - 18:05 | Link to Comment Ted Baker
Ted Baker's picture

BEHIND CLOSED DOORS:- IT IS THE SNB TOGETHER WITH THE GERMANS SELLING THE EURO AND BUYING THE POUND STERLING AS MR. KING HAS SIGNALLING CUTTING RATES IN THE UK TO DEPRESS THE STERLING AS THEY FOUND OUT THAT THE SWISS ARE CROOKS WHO HAS DECIDED THAT IN ORDER TO KEEP THE EURCHF FLOOR THE ONLY THING THAT THEY CAN DO IS TO EXPORT INFLATION TO ENGLAND....WHEN THE EURO REACHED A LEVEL THAT THEY WANT THE BUY IT BACK...FOLLOW THE GBPEUR AND YOU WILL SEE WHAT THIS MEANS

Thu, 07/19/2012 - 18:09 | Link to Comment Ted Baker
Ted Baker's picture

AND BY THE WAY THIS OF COURSE IS THE DRIVER BEHING THE USE AND ABUSE OF GOLD PRICES TREDING IN THE RATION OF 1-12 OVER THE LAST YEAR OR SO...END THE SNB

Thu, 07/19/2012 - 21:02 | Link to Comment dannyboy
dannyboy's picture

You don't have to type in all caps, we will read your comment, perhaps with a slight disdain with the all caps but most of us will read them.

Do you have some type of inside info on your claims?

Fri, 07/20/2012 - 00:30 | Link to Comment Itch
Itch's picture

Randomness tends to look like it has a reason. While everything else pushes out to new highs, the euro gets capped at range highs, then when everything else pulls back to their respective supports, the euro falls back the most. Its thin, choppy and people start jumping on the bandwagon after a while. But what it ultimately says is that the sellers aren’t going away.

Sat, 07/28/2012 - 16:48 | Link to Comment rianantoko
rianantoko's picture

up to down and down for the ride ....

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