Yesterday 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 year old concept based on exchange rate structure. Its tradition. Seems few understand such concepts yet USD Thanksgiving is 200 years old and we know it, celebrate it. We know when it arrives and when it stops. How does a trading platform know this destination tradition and how does each platform the world over broker to broker, bank to bank know the destinations must be achieved.
Why do all platforms perform exactly as the other and do it all at one time. Does it really take money to drive a currency price or does money not matter. How does every trading Platform know where a currency price should stop. How does every trading platform know where a price begins. Hundreds of currency pairs exist yet all know where to go, where to stop, where to start. And its done in perfect unison.
Why do we not understand the concept of “Priced In”, why do we use such generalized concepts to explain an important yet intricate market development. Is Fed Funds rise really ” Priced In”.
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.
My good speculation is Platforms are programmed to interest rates. The money part in what moves a currency price is so far secondary, it doesn’t matter. Generalized words like volume, liquidity are pretty much non explanatory words to the daily trade. With $10 or 10 trillion, the currency price will still reach its destination.
Why does the currency price not move in American market afternoons. Is volume and liquidity really the explanation. The currency price fulfilled its obligations, no need to move anymore. Money and traders can’t stop a currency price destination from achievement. Wonder why the platform isn’t programmed to Slow Stochastics, MACD. How is the exact science of interest rates so simplified. Its an arduous process to figure and factor. Does 1 yield taken from the whole series of yields impart knowledge.
What are all those persons doing overloading central bank websites on meet days.
Why do we want to become economists as well as expert traders. Does both concepts mix. “Priced In” is a concept to refer to a news announcement and its seen miles before the actual release. No need to become an economist unless its ones desire. Yesterday, Draghi was wishy washy. What was really wishy washy. EUR/USD and USD/EUR were in perfect unison. Perfect unison meant Draghi yelled from the rooftop, I am going to deliver a crazy wishy washy message, bullish yet dovish, sure yet unsure .Positive yet negative.
EUR/USD. Today’s range 1.0723 to 1.0471. The top rose 62 pips since yesterday morning while the bottom also rose by 62 pips. Overall the range expanded by 1 pip to 252 from 251 yesterday.
Two points we’re watching over many days is again 1.0597 and 1.0665. Above 1.0665 then 1.0708, 1.0723 and 1.0736. How to see 1.0665 is by breaks at 1.0600, 1.0605, 1.0622, 1.0634. Add USD 1.0650 is a huge break point.
Below 1.0597 and bottom points are 1.0485, 1.0458 and 1.0442. Below 1.0442 then the floodgates open to 1.0387 and 1.0301.
EUR/USD current price is built upon a base at 1.0301 and 1.0285.
Brian Twomey Inside the Currency Market, btwomey.com