I have DX short from 81.85 with 50% cover at 81.40. I had covered and re-shorted, both at 80.70. I'm thinking this is an intermediate term deal. Pattern-wise, a lower low is the cleanest, to like 68-70.
First thing I realized was the DX AND 6E are making LL, LH since 2009. I had always assumed the DX is center of the currency universe and EUR is inversely and directly correlated. Why aren't they directly correlated? The conclusion first: The RMB is strengthening such as to trend DX down and it is the plan of some.
Supporting this realization:
Timmy asks them to strengthen the yuan. It's not the first time. You might consider it stronger than a suggestion. I think it is interesting to note, Timmy represents the United States on the IMF Board of Governors. Demand
The IMF says the RMB is very undervalued, read all about it. Demand
Japan Demand
So, I wanted to see the composition of the DX (the Dollar Index) and I realized the Renminbi is not a part of the Dollar Index. All I see, is this 'other' growing year to year at a decent rate of change, even if it appears small in size. Can that little bit be enough to down trend 90% of the world's currency (EUR + USD)? Or is this like the world's richest men lists where 12-figure legacy bankers, sheikhs and princes aren't counted?
So I am already wanting to be long RMB and short DX, but I only see this RMB at the CME and it is the thinnest thing I have ever looked at, lol. So, I'm thinking wtf, what is the answer?
Then I see, London and UK Government. When the City starts trading the RMB, I wonder what happens. The RMB listed on the CME trades about 5 contracts a day so I wonder, given this hype, if London will make it a more liquid instrument and if that demand may pick up the overall global distribution of China's currency. I read it as demand regardless. (Google: Renminbi London)
There is plenty of debate over whether the RMB will become a reserve or perhaps the reserve currency. It would require a physical printing of the currency, perhaps creating some supply to the equation. This may be a case where supply creates demand in the near future... I think by the Chinese Officials allowing significant trading operations to take place in London of the RMB is a showing of their liberalization of their currency.
Remember, DX and EUR are trending down together and notice all the risk put on this last week in damn near everything. This week, following the inflection point, was totally different than times past I can recall.
gl, something big changed this past week imo. It's strange. I'm blaming it on the above for now perhaps as part of the transition to the diversified global currency system. Remember last summer, the IMF wants to print some money bad http://finance.yahoo.com/news/IMF-Prepares-2-Trillion-Euro-wscheats-2328292083.html in the face of the US Congress threatening to limit money supply. I can't find the right article from back then. They spent their 2 trillion anyway.
I can't be too far off, I mean, sure I could, but... I see that the real inflation is here now.
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Monday afternoon 1/23/12:
Put my stop to 80.70 on DX, on second thought, covered it 79.965
Long SI 32.195, stop 31.80....sold 32.42
Timmy asks them to strengthen the yuan. It's not the first time. You might consider it stronger than a suggestion. I think it is interesting to note, Timmy represents the United States on the IMF Board of Governors. Demand
The IMF says the RMB is very undervalued, read all about it. Demand
Japan Demand
So, I wanted to see the composition of the DX (the Dollar Index) and I realized the Renminbi is not a part of the Dollar Index. All I see, is this 'other' growing year to year at a decent rate of change, even if it appears small in size. Can that little bit be enough to down trend 90% of the world's currency (EUR + USD)? Or is this like the world's richest men lists where 12-figure legacy bankers, sheikhs and princes aren't counted?
So I am already wanting to be long RMB and short DX, but I only see this RMB at the CME and it is the thinnest thing I have ever looked at, lol. So, I'm thinking wtf, what is the answer?
Then I see, London and UK Government. When the City starts trading the RMB, I wonder what happens. The RMB listed on the CME trades about 5 contracts a day so I wonder, given this hype, if London will make it a more liquid instrument and if that demand may pick up the overall global distribution of China's currency. I read it as demand regardless. (Google: Renminbi London)
There is plenty of debate over whether the RMB will become a reserve or perhaps the reserve currency. It would require a physical printing of the currency, perhaps creating some supply to the equation. This may be a case where supply creates demand in the near future... I think by the Chinese Officials allowing significant trading operations to take place in London of the RMB is a showing of their liberalization of their currency.
Remember, DX and EUR are trending down together and notice all the risk put on this last week in damn near everything. This week, following the inflection point, was totally different than times past I can recall.
gl, something big changed this past week imo. It's strange. I'm blaming it on the above for now perhaps as part of the transition to the diversified global currency system. Remember last summer, the IMF wants to print some money bad http://finance.yahoo.com/news/IMF-Prepares-2-Trillion-Euro-wscheats-2328292083.html in the face of the US Congress threatening to limit money supply. I can't find the right article from back then. They spent their 2 trillion anyway.
I can't be too far off, I mean, sure I could, but... I see that the real inflation is here now.
__________________________________________________________________________________
Monday afternoon 1/23/12:
Put my stop to 80.70 on DX, on second thought, covered it 79.965
Long SI 32.195, stop 31.80....sold 32.42
