It was a nice buying opportunity for some currencies yesterday, but the window didn’t stay open long. I’m glad I had time (and the guts – it wasn’t an easy call) to pull the trigger.
From the Daily Pfennig’s Chuck Butler:
“Good day… And a Terrific Tuesday to you! Well… I sure received a shock yesterday morning… After ranting about the euro, blah, blah, blah… I hit the send button, and then got ready for work… After arriving, and turning on my currency screens, I saw euros had fallen 2 whole euros! That was in less than an hour!
OK… Now my tail was between my legs, and I whimpered off to a company meeting. After an hour and a half, I returned to my desk to see that the euro had bounced off its low, but still much lower on the day from where it stood overnight! So, what caused this huge sell off? Well… Margin calls on stock losses was a reason… And so was a technical correction…
The margin calls on stock losses can also be blamed on the sell off of Gold too… As the day went on… Stock recovered, which meant risk was creeping back into the markets, and led to Carry Trades being put back on… Japanese yen, lost the luster of the 113 handle it held yesterday morning.
So… Does this change everything I said yesterday about the G-7 giving the markets the green light to sell dollars? NO! And I still believe that the euro will be trading up to 1.50 within the next 6 months…”