vlad.adrian
Short

EURUSD - Correction definately over

FX:EURUSD   Euro Fx/U.S. Dollar
849 16 12
This is a follow up for my previous chart. I am still a huge bull on the dollar. The rumors about a Greek deal managed to push the Euro             lower, a classic buy the rumor sell the fact type of trade. During this correction, the Euro             shorts were heavily trimmed according to CFTC.

All planets are aligned for a dollar surge. Now that the Greek drama is over, all you have left is a somewhat hawkish FED that gets good data from the economy, and an ECB that is pumping 60 billion per month into the economy. Why would you not short the Euro             and buy the dollar??? I invite you to comment, I am curious if anyone has a positive scenario for the European currency.
pezq PRO
a year ago
Carry Trade?
Reply
vlad.adrian PRO pezq
a year ago
What carry trade?
Reply
rv
a year ago
only because, a stronger USD may prove an overhang for the stock market, this time around.
Reply
vlad.adrian PRO rv
a year ago
that might be true, but who will stop it?
Reply
rv vlad.adrian
a year ago
thats a good question. ( what will stop it ? )
Reply
pezq PRO
a year ago
Borrowing Euros is cheap. It's a known cost. Easy to place elsewhere. So Euros keep getting bought
Reply
vlad.adrian PRO pezq
a year ago
that would make the euro fall, not rise :P
Reply
aaahmed12 vlad.adrian
a year ago
i thought when a product is in demand, the price for it increases. same for currency, if the euro goes up as pezq is assuming, the euro's should go up right?
Reply
vlad.adrian PRO aaahmed12
a year ago
If we talk strictly about carry trading and not something else, you go loan Euros, and then you have to convert them into another currency, hence euro goes down. Carry trade involves 2 pairs, the one with low interest rates will go down and the pair with higher interest rates will go up.
Reply
aaahmed12 vlad.adrian
a year ago
an appreciation in the currency to be more technical about it
Reply
fash aaahmed12
a year ago
The demand and subsequent appreciation might be true if the supply was limited...but in the case of the euro it is not (60 billion created per month).
Reply
vlad.adrian PRO fash
a year ago
No it's not about demand, it's all about the carry which involves two pairs.
+1 Reply
pezq PRO vlad.adrian
a year ago
You are an American hedge fund and you borrow a billion euros (swapping your dollars). You then invest your euros somewhere else with a higher return. This causes the dollar to fall against the Euro. What happens when you invest those euros somewhere else depends on what you invest in
Reply
vlad.adrian PRO pezq
a year ago
You've got it all wrong I'm afraid.
In order to borrow euros you do not need to convert your dollars, that is why it is called borrowing, then you go with your euros to another country and you exchange the whole amount to that currency (I don't know if you can do that without exchanging to dollars first, but it doesn't really matter in this case) hence the euro goes down. There are many articles about carry trade on the web.
Reply
pezq PRO vlad.adrian
a year ago
I was specifically talking about the euro/dollar scenario
Reply
Placed these with a 75% tp:
Potentially falling to the location signaled by the arrow.

snapshot
Reply
Ideas Scripts Chart
United States
United Kingdom
India
España
Italia
Brasil
Россия
Türkiye
日本
한국
Home Stock Screener Economic Calendar How It Works Chart Features House Rules Moderators For the WEB Widgets Stock Charting Library Priority Support Feature Request Blog & News FAQ Help & Wiki Twitter
Private Messages Chat Ideas Published Followers Following Priority Support Public Profile Profile Settings Billing Sign Out