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Posts by "montmorency"
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74 Posts by Anonymous "montmorency":
Let's say EUR/USD got down to 1.32 by mid March (as suggested in a recent AL Tweet), but that cable remained around, say 1.5900.
That would suggest a EUR/GBP value of around 0.8300, so around 400 pips down from where we are now.
However, for EUR/USD to fall that far, it would seem unlikely that cable wouldn't also fall.
Let's say cable fell to 1.5800 => EUR/GBP=0.8354
1.5700 => 0.8407
1.5600 => 0.8461
...
1.5200 => 0.8684
...
1.5000 => 0.8800
Well anyway, cable would obviously have to fall quite a way for the current value of EUR/GBP to be maintained in those circumstances.
I suppose it's all a question of the relative speed of movement of EUR/USD versus cable, and of course in which direction.
It is theoretically possible for there to be very Euro-negative news around which does not also directly impinge on the UK/Sterling, although I would have thought in practice, these things always have ripples outward.
If you believe in the concept of support and resistance (and I'm not really sure that I do, at least not very strongly), then you might postulate that say cable will find support at X, and resistance at Y; and that EUR/USD will find support at point A and will find resistance at point B; and you may even be right, at least for a while.
However, you will find it much harder to determine whether cable will reach point X before EUR/USD finds point A, etc. Therein would seem to lie the difficulty.
There is also then the question of relative number of trades in EUR/USD, cable, and EUR/GBP.
I can't find the statistics quickly, but it's pretty certain that both EUR/USD and cable are each individually more dominant than EUR/GPB. It is therefore fairly certain that it's EUR/USD and cable that are driving EUR/GBP and not the reverse. For this reason, I find it rather unlikely that any organisation (be they a "cartel" or otherwise) could use EURGBP to manipulate EUR/USD and/or cable.
Story was more relevant at 1225 than now, to be honest. The bubble is already leaking.
OFF-TOPIC:
Your post reminds me: Does anyone know why some URLs posted here work as proper clickable links, and others don't? If have tried using HTML tags here sometimes in the past, but they seem to get ignored.
My own approach is large stops and patience. Not everyone's cup of tea I know.
There are also scalping-type opportunities.
Ashraf has recently tweeted that Euro is a safer short than cable.
The big question for me was whether Euro would significantly rebound up (well above 1.4) before sinking properly beneath 1.4. It didn't seem to in the last 8-10 hours. I usually end up shorting it too low, and am trying to avoid that this time. It doesn't look like it's going anywhere fast for the moment, but as we all know, things can quickly change. I have no reason to doubt Ashraf's 1.38 target ultimately. My only question is where it will go between now and then.
Also have orders for
(Short) EUR/USD 1.4085
& (Long) EUR/GBP 0.8659
We have to understand that losing is part of trading, just as much as winning, and not take it badly.
I've had 4 losing trades (AUD/JPY and EUR/GBP - 2 of each) in the last week or so, big enough to hurt, not big enough to kill me, but painful because (probably) avoidable. Hope I've learned some lessons out of it. What is difficult is to resist the temptation to "revenge trade". I'm keen to climb back on the EUR/GBP horse. Every time I think "surely it can't go lower...", it does just that. However, ~0.8700 is looking like a bit of a floor.......thoughts anyone?
That said, I don't take this price action malarkey as quite seriously as I used to and it can fail just as often as it works. However, you will often see it working in the short-term, especially on little pull-backs (if it is one) like this.
I work off 1H charts minimum (I sometimes snatch a look at the 15M just to see where in the "cycle" of the hour it is before placing or closing trades), and daily or weekly for main direction and for "levels".
So after every 2 or 3 down hour-bars, I'd expect an up-bar or two. Admittedly that 20:00 bar is very bullish looking, so maybe it will carry on up for a bit. I'd still be (eventually) looking for a shorting opportunity next week.
This is just a comment, and not (of course) any kind of recommendation.
Seems to be finding support around there, at least for the time being, but the tide seems to have turned somewhat