# EURO - Long of the Year



## money tree (1 December 2005)

ECB will raise rates 4-5 times over next 12 months. The Fed is unlikely to raise. 

Eur headed back to 1.36 (and maybe 1.50)


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## wavepicker (1 December 2005)

money tree said:
			
		

> ECB will raise rates 4-5 times over next 12 months. The Fed is unlikely to raise.
> 
> Eur headed back to 1.36 (and maybe 1.50)




Interesting assumption moneytree. Unfortunately if we rely on the actions of the ECB and the Fed alone is a poor startgey, otherwise everyone would be making money.

My analysis points to the US Dollar taking breather from it's current uptrend and a small pullback probably until end of Jan or Feb 06.(Euro should rally to 1.26/7 in the same timeframe. Thereafter the US Dollar will be the Long of the Year. This will be a great shorting opportunity for the EURUSD until it reaches a final low of 1.00-1.04 in December  06-Feb 07. 

After that low will be an excellent long term long position in Euro


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## wayneL (1 December 2005)

http://www.morganstanley.com/GEFdata/digests/latest-digest.html

I agree with MT. COT data is saying the same thing. I've got a post somewhere on the subject

Just looking for technical justification to enter. How far it goes I don't know.


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## wavepicker (1 December 2005)

wayneL said:
			
		

> http://www.morganstanley.com/GEFdata/digests/latest-digest.html
> 
> I agree with MT. COT data is saying the same thing. I've got a post somewhere on the subject
> 
> Just looking for technical justification to enter. How far it goes I don't know.




I am sure you are correct wayne with your COT data. We should get a rally in the Euro. This will only be a temporary one however. The rally started by the US Dollar 12 months ago is to short and too shallow an upward retracement to be finished. It looks to be a classic long term inverted head and shoulders formation that has just broken the upper neckline and is about to reverse and re test it which is typical of H & S formations.


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## TjamesX (1 December 2005)

I know very little of forex, but Buffet has built up large positions against the USD. He has had to close out some positions with the recent rally, but over the long term Buffet gets it right more often than not......


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## wavepicker (1 December 2005)

TjamesX said:
			
		

> I know very little of forex, but Buffet has built up large positions against the USD. He has had to close out some positions with the recent rally, but over the long term Buffet gets it right more often than not......




It's ironic that Buffet took out a large short position on the US Dollar almost to the week of it bottoming!! All this was done amidst dollar bashing that has been going on for months by the financial media. Sounded like an excellent contrarian play to me as I went long the dollar at the same time. Buffet's short position was the ultimate buy signal for me. Don't get me wrong, Buffet is probably one of the best stock pickers who has ever lived and a legend. He is great at stock picking. Market timing well who knows? Time will tell.... So far with his dollar play has been not so good.


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## WaySolid (2 December 2005)

Strong seasonal tendency for the Euro to rise vs the USD this time of year as well.


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## money tree (2 December 2005)

wavepicker

currency markets are controlled by central banks, NOT chartists.

chartists were nowhere to be found when EUR was 1.36 and fell 2000 pips. They were all calling for 1.50.

Likewise now the chartists are all dollar bulls.....in fact everyone is. Typical of the end of a trend.


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## wavepicker (2 December 2005)

money tree said:
			
		

> wavepicker
> 
> currency markets are controlled by central banks, NOT chartists.
> 
> ...




Money Tree, I never said the currency markets were controlled by anybody. Granted the Central Banks have a big say into what happens in markets, but the forex market has become so big today that I don't think anyone controls it!! All I said was what I beleive is in stall for the Euro and US Dollar Index

l along with many other elliott wavers were bearish the euro at 1.36. This same chartist is long at the moment and will stay long until this temporary rally completes in 2-3 months time. Thereafter I will turn bearish again. HOWEVER, I too am very long term bullish the EURUSD

 There is no right or wrong way to analyse  for your trading decisions. You do what works for you, be it charting, T/A, or a fundemental basis.

All  that can be said is: STUDY YOUR MARKET WELL


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## websman (2 December 2005)

I hope the Euro goes down the tubes before March.  I'll be spending a week in Paris and would love to be able to find some bargains.


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## wavepicker (2 December 2005)

money tree said:
			
		

> wavepicker
> 
> currency markets are controlled by central banks, NOT chartists.
> 
> ...





Money Tree for your info this was made in the press this morning:

Sydney, December 2:
The EUR/USD followed a  script that was predicted by many analysts in Asia 
yesterday. The ECB hiked  25 bps, Trichet confirmed there were no plans for a 
"series of hikes", the  EUR/USD broke lower and regional central banks came into 
buy below 1.1700,  resulting in a pullback. 
The market"s attention now shifts towards US  non-farm payroll data and there is 
some talk that the number might surprise  on the upside. This talk should keep 
the USD generally buoyant and limit  EUR/USD attempts to the topside. The 20-day 
MA at 1.1755 should provide  decent resistance and 1.1805 now appears to be 
formidable resistance in the  short-term at least. Support between 1.1680/90 
should hold at least until  the US payroll data is released. We are looking for 
the EUR/USD to trade  1.1705/55 in Asia today. The EUR/USD trades 1.1735/40. --


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## robots (2 December 2005)

hello,

forget buffet, frank lowry and what he has done creams him

sideways for a long time

regards
robots


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## websman (2 December 2005)

robots said:
			
		

> hello,
> 
> forget buffet, frank lowry and what he has done creams him
> 
> ...





Actually, I would agree with you Robots.  I don't see the Euro making any big moves up or down in the near term.


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## wayneL (23 December 2005)

Another long signal on the Euro (and Yen)

Charts here


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## WaySolid (23 December 2005)

WaySolid said:
			
		

> Strong seasonal tendency for the Euro to rise vs the USD this time of year as well.



 This is also based on the Dollar vs DM going back over 35 years.

There are accounting reasons I believe for this tendency. Beats me how this works but the seasonal tendency looks to be strong and it would appear to be some fundamental reason working for this in December.

Would be very cautious about a 12 month view for the Yen and Euro to strengthen against the USD however. IR differentials still very strongly in favour of the USD. Yes the differentials are changing, but they will still favour the USD for some time yet it would appear, and we all know how much money your investment gets from the Japanese banks don't we.

Just my thoughts, not even trading them yet either. But looking into FX carry trading at the moment as part of my education.


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## money tree (5 January 2006)

sold 2113 +463


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## wavepicker (26 February 2006)

money tree said:
			
		

> sold 2113 +463




that is great news, I am happy you made a good trade, but did you not say your targets were as follows:-

ECB will raise rates 4-5 times over next 12 months. The Fed is unlikely to raise. 

Eur headed back to 1.36 (and maybe 1.50)

OR have you changed your mind suddenly? So much for relying solely on fundamentals for your trading decisions, somewhow I can't see EURUSD back over 1.36 by years end.

good trading moneytree


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