EURUSD: a special jar of honey for Bear, the resident EurUsd champion!

from Mrs. Gooch's, now called "Whole Foods" (in Calif., perhaps elsewhere too) :) :)


Now dig this!

Note: This is a work in progress as we need more future developments in price and rates to see how solid this concept is.

Study accompanying chart carefully for heretofore paroxysms of lies, deceit & torrents of false data will be vanquished & obliterated within a few seconds.

Initial conclusions: The only factor is the 0% Interest Rate differential line (bottom panel) -- makes sense too -- why? well, would you rather the bank pays you Interest on your deposits or would you prefer to pay them for holding your money? Therefore, when the differential of the 2 rates, i.e. USD minus Euro Interest rates crosses the zero perecent line, the investing/yield chasers skiddadle from one zone to the other. Simple, simple, simple, nothing but sheer net! I'm laughing my ass off, hehehehe!

(1) Rising Euroland Interest rates don't mean doodly squat to the direction of EurUsd. In 1999 and 2000, european rates were rising (see chart, middle panel), yet EurUsd was dropping like a stone. Then from 2000-2004 rates were falling precipitously, yet what did EurUsd do? Heck, she flew upwards like a rocket! ..... Therefore, whenever the Media and fatcats utter rubbish about how the dollar is going to fall because ECB is starting a new hike trend, just drop a big, malodorous sausage on their collective heads! Bah! :)

Why? Because its not just the individual rate that's important, rather the differential between them and, even then, its the zero % line that is the final arbiter of the trend in EurUsd. Remember the saying, "money talks, bullsh*t walks?"

(2) The 2 vertical red lines in the chart show where the zero line was crossed. The turn in EurUsd same shortly thereafter and, like inspiration, it came softly and mellifluously. Observe then that it is just a matter of the differential being above or below this line -- it can meander, go up, go down, wander as long as it wants, but as long as it does not cross the zero line, hedge funds and other yield chasers will not budge -- as far as this currency pair is concerned. They may leave if other pairs offer more promise of bettter yield, but as far as this pair is concerned, the zero rate line is the 1000-lb gorilla!

(3) Focusing on the bottom panel of the chart, and to the right, we ain't got nothing to worry about because even if ECB starts hiking and Fed stops, it will be a loooong time before the zero line is crossed! Long live my buddy, USD!

(4) Simplicity is my forte, but is this just too damn simple? Think about women, for example (no disrespect intended or implied) -- every single one that went with me was based on sheer, utter simplicity or directness of my approach; no false pretenses, deceits, lavish stories, preparation, planning, etc., etc. -- if it works in that market, why shouldn't it work here, hehehehe? :) :) :)

This is too deep for me, I'm off for a swim.

Adios amigos.

Joseph