EUR/USD and Trade Platforms

This morning’s post mentioned central bank website overload on meet days. Why crowd the ECB website. I see 3 reasons: Euro Repo rates, Euro Commercial Paper Rates or Libor however Libor is a readily available interest rate. All 3 interest rates are an indirect EUR trade and the overall effect to EUR/USD rises and falls are minimal, at least as it concerns EUR and Europe. Other nations maybe different as each nation runs their own specific money market as they see fit to their own interest and exchange rates. If those market participants had an interest trading EUR/USD this morning, the ECB website was not the place.
This morning was mentioned EUR/USD above 1.0605 then 1.0630 and 1.0645 was next. EUR/USD dead stopped at 1.0615, we sold higher to the break below 1.0597. EUR/USD dead stopped in the 1.0560’s.
Exchange rates everyday must fulfill destinations. Its almost by law destination must be seen and its a 200 years old concept based on exchange rate structure. How does a trading platform know this and how does each platform the world over broker to broker, bank to bank know the destinations must be achieved. Why do they do it all at one time. Does it really take money to drive a currency price.
When the SNB dropped the EUR/CHF 1.2000 Floor, EUR/CHF dropped 3500 pips in minutes. As if thousands of traders were waiting with billions of dollars at the ready for the SNB to make the move. Interest rates was the determining factor to how far and where the currency price would end. Money wasn’t an issue.
Thankfully I’m not an FX insider but just a 14 year trader. I designed trading systems as my own knowledge grew. I began with indicators then moving averages and moved to Statistics. Now I realize a child of 12 can trade currencies daily and profit. Here’s why.
My feeling is Platforms are programmed to interest rates. The money part in what moves a currency price is so far secondary, it doesn’t matter. With $10 or 10 trillion, the currency price will still reach its destination. All this new look at yields and then the Real V niminal is pure pablum. Some take 1 yield from the whole, explains nothing and its far removed from the structure of exchange rates.

EUR/USD: Levels, Ranges, Targets

Takes a massive amount of attempts to obtain necessary central bank trade data on Central Bank meet days. All those late to the meeting come at one time and severely overload the system. Offers a grand assessment how the FX experts handle central bank meet days.
The BOE by far is the toughest of all the central banks while the RBA and RBNZ remain easiest of all central banks. Bank of Canada can be rough if the meeting appears to result in an interest rate change otherwise the BOC is easy. The Federal Reserve is a breeze. The BOJ is fairly easy while the SNB is like the BOC. If an expected interest rate change is upon us then the SNB can be rough. What separates the central banks in meet days is the times to trade, the times to factor the data, the times when the data is old and worthless and the times when the data is hot off the presses. The late comers to today’s ECB meeting should’ve been prepared long before as I am on this day. If traders were in charge of exchange rates, below is how the ECB views this day.
EUR/USD. First is the ECB blocks exchange rates. Today the range is blocked by 251 pips from 1.0660 to 1.0409. The ECB from Sunday’s open is offering 2 additional pips on this day as the range for the week was 249 pips from 1.0746 to 1.0497. Must consider, we are still dealing under break points. An actual range break isn’t found until 1.0729 then the bottom range at 1.0300’s.
The ECB dropped the topside to allow the bottom to rise. Central banks are most unfriendly to exchange rates because they despise movements unless they have an overall target in their economic game plan. Sept 2014 was the perfect example for the ECB when they went negative interest rates. By blocking the topside, the ECB message is focus on the downside as this is the overall trend and ECB intent.
On the topside, Draghi must speak in radical terms to see 1.0660 today. We are looking at sell points starting at 1.0597, 1.0602 to 1.0605. The best Draghi can take us to 1.0660 is 1.0630 and 1.0645. These upper points are not expected today but again a redical remark to see 1.0630 then we’ll sell higher back near 1.0605 with focus on a 1.0597 break below. EUR/USD breaks higher by 1.0557 and 1.0571.
While 1.0409 is the vital break below, 1.0406 reinforces 1.0409 then 1.0396. Today, we are looking at 1.0479 and 1.0465 to contain any drops. We arrive at this destination by breaks at 1.0529, 1.0510, 1.0507 and 1.0495.
Current sits on a big base at 1.0340’s and 1.0224.

 

Brian Twomey