Quote:
Originally Posted by ratan
I know what the charts are saying but have you factored in the fact that the middle east is dumping there US reserves along with China and Japan? This puts a new twist on things I think. If {there} national banks are bailing out of a greenback to get what they can for it that means there currency will be worth more to them than it has in the past because most foreign banks based there treasury reserves on the strength of the Greenback. Today I heard japan is trying for 50% or less and are at 68% now. Back in Aug they were at 90%!! The detachment of there reliability of the west is weakening as to is the middle east and the EUR. I have head the EUR wants a very strong differential to the US like the rail. The middle east India ect...like the EUR over the USD. And Japan is trying be less reliant of the Greenback. That means a new King of currencies is trying to make the thrown!? Which will it be is the question. The pound is most stable the EUR is fighting to reign supreme over the JPY. As the demand for USD weakens what would this mean for the pars? I think this is a very relevant scenario. The more I watch my screens and listen to the 20 news feeds from around the world in my station central at home the more I see slowly but surly this happening. Whats your thoughts on this?
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'm glad you bring up the other side, the fundamental side. I personally rarely consider nor trade based on fundamental data so my analysis may not be much use to you, and that's understandable. I personally believe that people and crowds move the markets, and therefore crowd psychology and sentiment ultimately tell us where the market will go. Elliott Wave Principle states that there is a distinct pattern in these moves. With that in mind, we're in the final throws of a large wave 3 which means dollar capitulation should rule the day. Many things you say, along with the daily barrage of horrible news feeds hammering the dollar and hoisting gold just contribute to the fact that the dollar is forming some sort of bottom because sentiment is at an absolute extreme low. I believe that once something is beaten to a pulp and it's lying there bloody and unconscious and no one wants it...............that's when it's time to buy it!
Also, the dollar is about to embark on a large 4th wave rally which is at the end of a long wave 3 decline so the move would have to come as a big suprise to the large majority who will get caught trying to continue riding that wave 3. I respect your viewpoint, and in the long run that will rule the day as I see the dollar continuing much lower in the long term. But for now, dollar is oversold and needs to recover and should gain over 1000 pips against the euro soon. I know it may sound like I'm blowing off the specifics of your question, but I purposely block out the details of the fundamental issues surrounding the dollar. I personally just don't find much use for them as what's really important to me is the "crowd's reaction", and that can only be seen in the charts and EWP.
With that said, I'm looking for a dollar bottom. Perhaps a sharp reversal can occur today, however it might happen next week when surrounding the Fed meeting.