OpenBook Traders Remain Bearish Despite Improved Investor Sentiment in E.U.


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(eToro Blog) News that investor sentiment improved for the all-important German economy and that Eurozone inflation continues to improve helped to push the Euro to an intra-day high. With the news, the Euro-Dollar surged to 1.2795, a gain on the day of almost 1.10%. Nonetheless, bearish sentiment continues to pervade in general on the eToro trading floor, but there remains good trading opportunities for many of the eToro traders.

Euro trader NMarijus earlier opened up a hedged short position in the Euro-Dollar, targeting 1.2727, but still holds open two longs, one of which has been open since mid-December and which moves ever further from his target price of 1.3398. Perhaps with improved sentiment he will see a reversal before too long. Over the past day, he opened and quickly closed several longs in the pair, which all returned a profit. Last week, no doubt to the dismay of his many followers and copiers, he closed out a long position that resulted in a 100% loss. His copiers still number an enviable 2830 strong, but he has clearly lost some supporters.

In market news, inflation in the Eurozone remains above the European Central Bank’s target of 2% but is steadily showing improvement. Earlier today, Eurostat reported that on a year-over-year basis, the EMU’s Consumer Price Index fell to 2.7% in December, besting analysts’ calls for a decline to 2.8% from 3.0%. Core prices on an annualized basis, exclusive of food and energy-related components, held steady at 1.6% in line with expectations and the previous reading. On a month-over-month basis, the CPI was reported at 0.3% in December, below expectations of a 0.4% reading but above November’s reported 0.1%.

Some improvements to the outlook for the Germany economy and the broader European Monetary Union were also reported. Germany’s ZEW Economic Sentiment Survey was reported at -21.6, a considerable improvement from the consensus call of -49.1 and the previous reading of -53.8. ZEW’s current situation survey for Germany also improved to 28.4 in December from a reading of 26.8 in November; economists polled had expected a decline to 24.0. While the Economic Sentiment survey,, which gauges expectations, still remains below the 24.5 historical average, ZEW reports that it is at its highest recorded level since July 2011 and suggests to their analysts that the Germany economy could stabilize over the next six months.

For the broader EMU area, the ZEW Economic Sentiment Survey was improved at -32.5 in December, besting the forecast of a -48.7 reading from November’s -54.1.

Trader pyruss continues to actively trade the EUR/USD pair, opening and then closing several short positions in the last few hours, all with decent profits. Pyruss is almost exclusively a low risk trader, and 94.3% of his entire allocation is in the Euro-Dollar. Over the past 24-hours he has opened in excess of two dozen trades, all in the Euro-Dollar with a broad range of target prices. He appears to be keeping a close eye on the U.S. opening to see if they will, “carry the bull?”

 Copyright 2012 eToro Blog

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Forex and Currencies , US Markets , World Markets

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