Forex

The next Fed Meeting could bring a big surprise. Perhaps, they elect NOT to lower rates by as much as anticipated. Then what? Will the FX market interpret that as the turnaround point? Will that be the catalyst that puts the lid on the falling dollar?

I do agree with some of the comments that perhaps the falling dollar has been arranged by the Fed in the first place. But, on the other hand that may be giving more credit than is due. That would have taken quite a bit of long term thinking.

It might be that the market was taking us that way anyway and at some point someone came up with the idea that maybe it would work in the US's favor so they went along with the inevitable.


There are many factors that have contributed to the weak dollar. But, like most commodity markets eventually the move feeds on itself for no logical reason and then ends with the classic "spike" blow off top that Jamie talks about. We may be at the end of that cycle now. It is always hard to tell when you are in the midst of the action.

It would be a big suprise, the FED not cutting. It would certainly hit Wall Street hard initially, and Wall Street basically runs the FED, so.....
Talking about intervention........Central Banks know their markets. It would be nice to do it now with technical indicators calling for a firmer dollar. They just need to give it a small push. But........ putting a line in the sand means they must stay put and do not walk away from it anymore. That could be very costly. Something else needs to be done too. A lower oil price would help, but how to achieve that?
It's getting to complicated for me. I'll just start buying and selling and hope to gain some points.
Good luck!

Actually, with G7 close, there will be fear to drag usdjpy below 100-- Thus, I can say that G7 is the catalyst for the dollar recovery even if "short-lived".

If euro continues higher, G7 will discuss this probably.

Fed wanted a weaker dollar, not a damaged dollar. The continued one-way exchange rate movement can't survive for long. Hence I booked the first tiny profit on shorts, looks like its finding bids 1.5550 for now.

But fib support should be strong near 1.55 so I will exit there and wait.

Anybody around with a nice short-term chart of EUR USD with EW points in it? I have difficulties identifying the i, ii, iii's.... I ordered a book, but it has not arrived yet....
Thanks in advance.

The Euro will rise to 1.60, especially if the Fed cuts again. At this rate, 1.75 EUR by summer is becoming quite possible. The Fed should NOT cut interest rates any further. In fact, the rates must be raised to defend the dollar. It is interesting to see the response from Benranke when questioned by US rep.

I do not think its the top for one reason. That high was probably just wave 3 within 5 wave bull cycle. So prices should come above it to complete 5 of 5.

Once 5 of 5 are registered, eventually prices will correct in a-b-c shape possibly first to wave 4 zone 1.5144-1.5270

To make things even more complicated !
I thought we were in 5, but now it may be 3.
Looking at the price action: its not a spike we're seeing. It's just bid, even at these high levels. Oil 110, Gold 1000, USD JPY 100. Traders like round figures.

I tried to count it as 3 but it looks like 5. The 200-pip quick down I find this a big wave 4, not wave 4 within 3..so 3 has ended.. Just me anyway

A follow-up to my late last night-very early (east coast US) post RE: INTERVENTION:

Peaceful Uneasy Feeling; Markets Wait For Intervention New York, March 13th. Talking to US traders, there is a strange feeling of trepidation; the catalyst the sharp overnight surge in EUR/USD to 1.5624, and the collapse in USD/JPY to 99.77; US traders have embraced this brave new world by range trading in a sideways chop, with very little conviction. Senior traders note that there was an overwhelming sense of impending peril as they arrived early at their stations. Street talk is that people who speak to central banks had a sense that something would happen, and would happen soon.
The US session has unfolded, trading has been reasonably well behaved, but that same uneasy feeling remains. Most traders feel that the dollar is close to a bottom, but they also feel that it will take a does of joint central bank intervention to promulgate it; a la the "Plaza Accord". Over the past 30-yrs the major trends have only changed after a significant event, traders are betting on a major bankruptcy that will force the authorities hands, or joint intervention to quell the markets fears.

I don't know??? Maybe Yes - Maybe No. I guess I wasn't the only one thinking along these lines. Sometimes even dumbasses like me can guess right! LOL. :-)

Closed the 1/3 left of EUR long position.
with 1.5620 being that top, 1.5680 a series resistance still untested. Things will get choppy as it seems from here on. But USD/CHF was swift in its reversal seems like the best place to be long USD against.