Last week, a major voice for the European banking system announced to the world that they would do whatever was needed to “save the euro.” As soon as I heard that, I went right to my charts and looked for a larger time frame supply level in the euro to use as a low-risk, high-reward, and high probability shorting opportunity. Here is why… I started my career on the floor of the Chicago Mercantile Exchange facilitating institutional order flow. This means taking large buy and sell orders from banks, institutions, money managers, hedge funds, and more, paying close attention to market price, and then making sure those orders get executed and filled at the proper prices. I started in the currency quadrant and was specifically responsible for the Japanese Yen, Canadian Dollar, British Pound, Deutsch Mark, and Swiss Franc markets. The highest volume and most volatile market of this group back then was the Japanese Yen so that’s where much of my focus was.
One of the main reasons for the high volume and volatility was the Bank of Japan (BOJ) as they were very active in this market. As you may know, Japan has been primarily an export economy which means they have desired a weak currency (Yen). A weak (cheap) currency makes their goods and products attractive to the rest of the world. Often, because of a strong economy due to strong export sales, the Japanese Yen would strengthen and the Japanese government and BOJ… Continue Reading
