##{"id":59533,"date":"2012-02-21T10:40:21","date_gmt":"2012-02-20T23:40:21","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/02\/21\/usd-poised-for-breakdown-versus-euro\/"},"modified":"2012-02-21T10:40:21","modified_gmt":"2012-02-20T23:40:21","slug":"usd-poised-for-breakdown-versus-euro","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/02\/21\/usd-poised-for-breakdown-versus-euro\/","title":{"rendered":"USD Poised For Breakdown Versus Euro"},"content":{"rendered":"<p>\n\t<strong>US Dollar Poised For Breakdown Versus Euro, Aussie As <span>Vols<\/span> Drop<\/strong><\/p>\n<p>\n\tBy David Rodriguez, Quantitative Strategist, <span>FXCM<\/span><\/p>\n<p>\n\tThe US Dollar trades within an increasingly tight range against the Euro and other currencies, but clear market complacency warns that breakouts may be imminent as the <span>EURUSD<\/span> and S&amp;P 500 trade near significant highs.<\/p>\n<p>\n\t<img decoding=\"async\" alt=\"\" src=\"http:\/\/www.fnarena.com\/ckfinder\/userfiles\/images\/dailyfx21-2a.jpg\" style=\"width: 700px;height: 556px\" \/><\/p>\n<p>\n\t<u><strong><span>DailyFX<\/span>&nbsp;PLUS System Trading Signals<\/strong><\/u> &ndash;We continue to highlight exceedingly low volatility expectations as clear risks to the safe-haven US currency. In the past two weekly outlooks we pointed out the fact that FX Options implied <span>volatilities<\/span> trade near their lowest levels since the beginnings of the global financial crisis in 2008. All the while, extremely bearish <span>EURUSD<\/span> sentiment has left large speculators very heavily net-short. As we highlight in our <a href=\"http:\/\/www.dailyfx.com\/forex\/fundamental\/forecast\/weekly\/eur\/2012\/02\/19\/Euro_Primed_for_Surge_as_Extremely_Bearish_Market_Refuses_to_Plunge.html\">weekly <span>EURUSD<\/span> forecast<\/a>, an extremely bearish market that refuses to plunge is quite bullish.<\/p>\n<p>\n\tMonday has seen the USD trade lower once again, and this author believes this could be the start of major breaks in key pairs. The next moves may prove pivotal as there&rsquo;s substantial risk of a short-term USD breakdown\/<span>EURUSD<\/span> breakdown as we trade near key levels.<\/p>\n<p>\n\tWe favor USD weakness against the Australian Dollar, Canadian Dollar, and New Zealand Dollar especially. Our bias currently points to an important USD breakdown across the board\/<span>EURUSD<\/span> breakout and we&rsquo;re positioned accordingly.<\/p>\n<p>\n\t<strong>Market Conditions:<\/strong><\/p>\n<p>\n\tVolatility expectations trade near their lowest levels since the onset of the financial crisis in 2008. Such extremely low levels favor &quot;risk&quot; currencies and paint a bearish picture for the safe-haven US Dollar.<\/p>\n<p>\n\t<img decoding=\"async\" alt=\"\" src=\"http:\/\/www.fnarena.com\/ckfinder\/userfiles\/images\/dailyfx21-2b.jpg\" style=\"width: 700px;height: 435px\" \/><\/p>\n<p>\n\t<strong>Definitions<\/strong><\/p>\n<p>\n\t<strong>Volatility Percentile<\/strong> &ndash; The higher the number, the more likely we are to see strong movements in price. This number tells us where current implied volatility levels stand in relation to the past 90 days of trading. We have found that implied <span>volatilities<\/span> tend to remain very high or very low for extended periods of time. As such, it is helpful to know where the current implied volatility level stands in relation to its medium-term range.<\/p>\n<p>\n\t<strong>Trend<\/strong> &ndash; This indicator measures trend intensity by telling us where price stands in relation to its 90 trading-day range. A very low number tells us that price is currently at or near monthly lows, while a higher number tells us that we are near the highs. A value at or near 50 percent tells us that we are at the middle of the currency pair&rsquo;s monthly range.<\/p>\n<p>\n\t<strong>Range High<\/strong> &ndash; 90-day closing high.<\/p>\n<p>\n\t<strong>Range Low<\/strong> &ndash; 90-day closing low.<\/p>\n<p>\n\t<strong>Last<\/strong>&nbsp;&ndash; Current market price.<\/p>\n<p>\n\t<strong>Bias<\/strong> &ndash; Based on the above criteria, we assign the more likely profitable strategy for any given currency pair. A highly volatile currency pair (Volatility Percentile very high) suggests that we should look to use Breakout strategies. More moderate volatility levels and strong Trend values make Momentum trades more attractive, while the lowest <span>Vol<\/span> Percentile and Trend indicator figures make Range Trading the more attractive strategy.<\/p>\n<p>\n\tHYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.<\/p>\n<p>\n\tONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES IS MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION.<\/p>\n<p>\n\tOF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS. Any opinions, news, research, <span>analyses<\/span>, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. The <span>FXCM<\/span> group will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance contained in the trading signals, or in any accompanying chart <span>analyses<\/span>.<\/p>\n<p>\tThe views expressed are not <span>FNArena&#039;s<\/span> (see our disclaimer).<\/p>\n<p>\n\tFor real time news and analysis, please visit http:\/\/www.dailyfx.com\/real_time_news<\/p>\n<p>\n\t<span>DailyFX<\/span> provides <span>forex<\/span> news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from <span>FXCM<\/span>.<\/p>\n<p>\n\twww.dailyfx.com<\/p>\n<p>\n\t<em><strong>Disclaimer<\/strong><\/em><\/p>\n<p>\n\t<em><u><span>Forex<\/span> Capital Markets is headquartered at Financial Square 32 Old Slip, <span>10th<\/span> Floor, New York, NY 10005 USA.<\/u><\/em><\/p>\n<p>\n\t<em>Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before you decide to trade the foreign exchange products offered by <span>Forex<\/span> Capital Markets, LLC, <span>Forex<\/span> Capital Markets Limited, inclusive of all EU branches, <span>FXCM<\/span> Asia Limited, or <span>FXCM<\/span> Australia Limited, any affiliates of aforementioned firms, or other firms under the <span>FXCM<\/span> group of companies [collectively <span>&ldquo;FXCM<\/span> Group&rdquo;] you should carefully consider your objectives, financial situation, needs and level of experience. If you decide to trade foreign exchange products offered by <span>FXCM<\/span> Australia Limited you must read and understand the Financial Services Guide and the Product Disclosure Statement. <span>FXCM<\/span> Group may provide general market information and commentary which is not intended to be investment advice and the content of this email must not be construed as personal advice. By trading, you could sustain a total loss of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading in foreign exchange products. Foreign exchange products are only suitable for those customers who fully understand the market risk. <span>FXCM<\/span> recommends you seek advice from a separate financial advisor.<\/em><\/p>\n<p>\n\t<em><span>FXCM<\/span> Group assumes no liability for errors, inaccuracies or omissions in these materials and does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. <span>FXCM<\/span> Group shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency. All information contained in this e-mail is strictly confidential and is only intended for use by the recipient. All e-mail sent to or from this address will be received by the <span>FXCM<\/span> corporate e-mail system and is subject to archival and review by someone other than the recipient.&rdquo;<\/em><\/p>\n<p>\n\t<strong>Technical limitations<\/strong><\/p>\n<p>\n\t<strong><span style=\"font-style: italic\">If you are reading this story through a third party distribution channel and you cannot see charts included<\/span><em>, we <span>apologise<\/span>, but technical limitations are to blame.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Market analysts at FXCM suggest while the US dollar has been trading in a tight range relative to the euro and other currencies, a breakout to the downside may be imminent.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10],"tags":[29],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59533"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=59533"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/59533\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=59533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=59533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=59533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}