Consistent irrationality in forex

If anything, there is indeed a method in the madness that has taken hold
of the market.

Again we have great figures for the US Initial Jobless Claims and the
USD continues to drop.

USD/JPY dropping and the EUR/USD ascending.

Just a bit more and I wouldn't be surprised if a major crackdown
occurs. This is really an "in your face" thing that has no problem
keeping the market irrational for an extended period.

THE NEW PARADIGM IN FOREX

I can just see the headlines now:

EURO AND JPY RISING TO NEW HIGHS ON USD STRENGTH

Duhhhhh

But that is how the market has been moving.

So here you have it, the new paradigm in FOREX:

GOOD FUNDAMENTAL NUMBERS = BEARISH
BAD FUNDAMENTAL NUMBER = BULLISH

Big improvement in US trade balance results in a stronger Euro

This comedy of errors simply does not cease.

We get a HUGE improvement in US Trade Balance and what happens?

The EUR/USD climbs HIGHER!!

Meaning because of the GREAT trade balance figures, the EURO is stronger
and the USD is weaker!

Looking over at the USD/JPY currency pair, you can see the USD dropped
against the EURO too.

Either the markets have turned stupid or there is something sinister.

Traders, someone is playing us.

Some strange movements in data release and EUR

The CPI for the Eurozone was released at 5:00 PM today in my time zone.

A highly volatile event, it was so curious that the data was released so
late and went from positive to negative and was interchanged between
core YOY and core.

Moreover, it seemed as though the EUR hung in midair and despite having
a double negative, it moved ever so slightly to INCREASE! Then gingerly
moved down and is parked now at its previous levels.

A highly volatile event in a hair trigger market and we get nary a
movement from the EUR/USD over negative EURO data?

If this is a precursor of events to come later, I will try and exit the
market before the fireworks.

Those who opt to stay in the market are well advised to ensure they have
wide margins and to not jump the gun after the first data release (GDP)
because the FOMC promises more volatility and possibility of reversal.

Pretty exciting series of events. I am very curious to see how it plays
out along with the other hidden market movers.

VERY VOLATILE DAY

Today July 31 is a day that will live on in infamy.... JOKE.

That is however not a really gross exaggeration. Because this day we
have so many high risk events and so many trigger happy traders.

First, in a few minutes we will have the Eurozone CPI. After this, we
have the US GDP. Then we have the FOMC rate decision and press
conference. All high risk events that has everyone on edge because this
is where the Feds will have to convey their sentiments about the start
of tapering IF it is to commence on September.

Moreover, the technical data all suggests to imminent breakouts in AUD,
USD, EUR and even JPY. The problem is no one can tell which way it will
go. It can go either way and this is what makes the next 12 hours pretty
tense.

So we have the EURO data coming up.

Good luck!

Thoughts while waiting on Euro data

Its just a few minutes to the release of Euro data and the more I observe events, the more I realize that there really is a hidden hand in all of these. Therefore the key to make money is to figure out how the hand will move.

Many forex experts are beginning to look pathetic. One day, they focus purely on fundamentals and next they focus purely on technical analysis in a bid to cover their erroneous projections the previous day.

If its enough to confuse a finance guy like me, then you can be sure the average Joe who just clicked the links that promised "to make lots of money through forex" has his head spinning.

Despite this scenario though, there is hope over the horizon. The Federal Energy Regulatory Commission has accused JP Morgan of manipulating power prices and if they can do this in the power market, then they can definitely do this in the Forex market. All that is left now is for the Feds to sit up and take notice before the hidden hand rips the market apart.

Here is a link to the JP Morgan rate manipulation story for those who are interested.

Its a heavy data week and its looking to be the wild wild west again with no sheriff in sight so good luck traders!

Useless fundamental analysis or what if the data is wrong?

The thought suddenly occurred to me that while I have been looking only
at the manipulation aspect, there is a possibility too that the data is
wrong and that the USD is in fact fundamentally weak.

I have been watching the USD/JPY go lower and lower all the while
reading about how the US economy is recovering and that the Japanese
want to weaken the Yen further. With all this rhetoric I am soooo amazed
at how this currency pair is sinking. All this strange movements are
making fundamental and technical analysis obsolete.

Bottom line is that there are other forces at work here. It certainly
makes no sense to speak of the USD being fundamentally strong and
technically weak so the only possibilities left are manipulation or
incorrect data. Go figure.

I hope that the growing number of traders questioning the market
movements will draw the attention of those agencies that can investigate
if any unscrupulous individuals are turning forex trading into their own
gambling nirvana.