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GVI Forex Jay  12:10:29 GMT - 10/23/2011  
I want to thank those who replied to my article although almost all have been by emailr ather than posting here. I am okay with thyat and here is another reply that is worth passing on:

Here are some responses (which could worse than useless as I did not sort them out but I heard them as price moves were you have to find the timing itself)

To your following questions as per my experience with the Friday european session ...

1. cable firm on safe-haven flows ahead of EU summit . 1.5850 break was good.

2. market chatter of FED doing qe3 (ttn 0028aest), but the original news (earlier) I sort of glanced seems to refer to US mortgage mkt.

3. toward the end of trading (at least many hours before the close), some of technical traders I follow were keen on the 'fx behaviour' of cable and eurusd friday closing up at high .. i.e. buy dip , don;t try to fade .

4. this is general and prior to friday .. some commentaries that money guys see a Europe resolution having a more explosive price impact than non-resolution (ie low probability but high impact), which means hope alone can trigger a eurusd jump in price (in another context, another terms it as performance fear, i.e. missing out on possible q4 rally) .

Just some sunday afternoon rumbling...

LA Barry  21:05:43 GMT - 10/22/2011  
US dollar index

Bulverde BB  20:48:41 GMT - 10/22/2011  
Thanks for the explanations Jay. I'll look at the charts a little later and if it doesn't make sense I'll get back. But ususally looking at the charts helps me make more sense out of it.

Pardon my ignorance, but what is a $DXY?


GVI Forex Jay  17:01:26 GMT - 10/22/2011  
I got this from a technical trader:

The weekly eurusd closed with a very nice hanging man, that might be of some help!? that looks weak, but the $DXY is also in a bag of crap, put the two together, you get one big bag, also known as the eur/usd currency pair,

Who was buying the EUR?, out the two bags, that one has got to be the weaker one,

When the short slide starts, with the expectations from the news & traders, it will get a little extra push this time, more like an avalanche, even my local butcher asked me today, should I sell some euro’s ??

Not quite yet.

GVI Forex Jay  16:58:39 GMT - 10/22/2011  
I am selectively posting direct replies and hope that it sparks some discussion during the weekend lull. This is reply from one of our members (my answer to his questions are in bold):

Great article! Once again, thank you for your assistance this past week. It looks like I picked a good week to stay out of the market!

I wish I had more answers than questions, but being a rookie, I’m afraid I don’t have much to contribute. I will say that as I follow the FNMA 3.5% security, there was a lot of volatility all week. The market had no direction and as a result wound up the week + 28 bp. I agree that the market took the data from the October Philly Fed meeting as positive and gave a little hope that we’re not going into a double dip recession. There was also some positive news in the housing market. But I think it’s very obvious that there is a tremendous amount of nervousness and uncertainty about what the future holds in Europe and the US, so volatility looks like the name of the game for a while until there is a clearer picture.

I do have some questions on your article. Some of the terminology is new to me. What do you mean by the following:

1. stay bid as technicals provided support -

I assume this refers to GBP/USD. If you look at the past 1 week daily ranges, there were 3 highs around 1.5850. Once that level was cleared, GBP/USD stayed bid. I am sure there are other technical reasons but this one stood out for me. This is why I suggest looking at more than one time frame chart and working back from a daily to 5 minute to put the overall picture in perspective.

2. gbpusd reverted to a lagging position -

GBP/USD moved up ahead of the EURUSD as EURGBP fell (i.e. EURGBP = EURUSD / GBPUSD) on demand out of this cross. Once the cross found support, EURUSD selling dried up and it played some catch-up as EURGBP came off its low while GBPUSD settled into a range at the higher level as demand from EURGBP dried up. This is what I meant by a lag. -- let me know if this is clear -- look at a chart for all 3 pairs to see the timing I referred to above

3. markets were in risk on rather than risk off mode -

Risk on refers to firmer stocks, commodities and a weaker dollar and usually weaker yen on its crosses. The yen did not trade its usual way on Friday although it also reverted to a lagging position after the early stop run. In a risk off market, it is vice versa, stocks and commodities trade lower and the dollar and yen generally benefit as safe havens.

4. shoot up over a big figure and then stay bid as technical provided support? See my answer in #1

If I am not clear, please ask me to elaborate.

GVI Forex Jay  16:28:51 GMT - 10/22/2011  
This is another reply:

I'm surprised it's taken you this long to work out there is NO logic to the Robbing currency market...Really ! if there were Logic, we will all be Rich!

GVI Forex Jay  16:27:22 GMT - 10/22/2011  
In reply to my article, Trying to Explain the Unexplainable,I got this response. If you did not get the email, contact me to get the article.

Ref €/$ only, but from a purely tech aspect it behaved perfectly. the whipsaw during the week turned out to be a triangle, a consolidation pattern, followed by a directional outbreak. but i agree with you, upside should be limited although i see close to 1.40 at least.

I'm the first one to admit this is a hindsight view since triangles are difficult to predict, but the longer the price action went on sideways with lower highs and higher lows, the more likely it became that a triangle was in progress.

GVI Forex Jay  13:22:58 GMT - 10/22/2011  
Use this thread to post your thoughts on the market in response to what I wrote in my article. This is an open topic as we seem to be at a crossroads in these markets.

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