AUTOREFRESH 
Major investment bank going short EUR/USD
By Sean Lee || June 15, 2009 at 21:15 GMT
|| 12 comments || Add comment
The guys over at Citibank have been having the same problems as myself the last few weeks, they are being chopped around in the wash. Nevertheless they always think their technical, fundamental and market arguments through before putting on a trade.
They have gone short EUR/USD at 1.3800, with a target at 1.3350 and a stop-loss at 1.3950. They have been tracking a H&S on the Gold chart which has now broken down and, although lagging slightly, they expect a similar formation to continue developing on the EUR/USD chart.
Well I had more bearish divergences last week on my cable charts than my cat could throw a hiss at, so I’m keepin’ the faith too.
Plus there was, apparently, a tweezer top effort on the daily after Friday’s close.
I’ve never found tweezers particularly useful, but here’s hoping they do a better job on this than pulling out rose thorns.
Morning Lilac. The cross is still throwing a spanner in the short cable works but as we know, once it turns, the fall from grace for sterling will be spectacular. I’m told that there are heavy stop-losses still around towards .8400 and just below but once they’re done then I think we can sell cable with abandon.
Sean, heavy stops (.8400) on which pair???
Sorry mate, in EUR/GBP. Once the stop loss selling is finished then I think EUR/GBP will stabilise if not recover and cable will fall back towards 1.50
OK, I don’t follow EUR/GBP, thanks!
I can see that up to a point, Sean – but I can’t help thinking that cable’s observing a modicum of deference to the cross, and p’raps less now that EUR/USD’s looking so precarious.
FWIW (and I know less about head ‘n shoulders than I do tweezers) I have a line on the EUR/GBP daily that I’ve had in place from 2 low points in January (roughly 8828 and 8798) which I s’pose was a neckline, also underpinning 8727ish in February – now conveniently pointing towards just above 8400.
PS Who’s abandon?
Gay Abandon, famous trader out of San Fran.
And so golden slumber awaits, with one less thing to wonder about
I cannot see any major formations on the EUR/GBP chart. I think we are witnessing an ABC retracement. The A move was 9550/8635. B was 8630/9490. We are currently in the C wave which might even fall towards the 100-day MA at 80. If this happens then I think cable will be at 170 so that’s why I’m waiting for the cross to play all it’s cards be4 I dive into a short cable play.
Hey, Sean. You were talking about the 50+ pip pops that occur with the Aussie last week that come from Central Banks (which i’ve seen several times in just the past few trading days) and I had a question. Last night there were 2 huge pops in the Aussie (60-80+ pips) in a matter of seconds, but on Bloomberg they had reported that the Aussie’s were concerned with the run in their currency. Any idea what was going on there? It seems that if they were so worried with the run in their currency, that they wouldn’t be popping short stops like pure madness.
The RBA has been consistently selling over the last 2 weeks above .80 but my own personal view is that they are not so much worried about the present level of the AUD, more so they are booking profits on the huge amounts they bought at .60late last year. They probably feel that they will need all their ammunition in case we get a second phase of market turmoil. I don’t think they will worry too much about the AUD strength until it gets over .90.
I’m not sure what happened last night but this is how the mkt works in Sydney. There are 4 main banks and the whole set-up is quite incestuous in that everybody knows pretty much what everyone else is doing. There are only a small number of ‘players’ and once they start doing something, everybody knows about it in seconds, and that’s why we see frequent sharp gaps