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Swiss Referendum Fails, USD Strength Ahead Dec. 1, 2014

Swiss Decide NOT To Protect Their Wealth

As the one country in the world that used to have the soundest money policy (Switzerland) fades into the fiat debt laden “inflation at all costs” we heard from Japan it would seem that all has been lost for any type of sound monetary policy in the future. Of course eventually it will fail as all fiat currencies have in the past due to the same debt, living beyond a countries means etc. that caused the fall of ALL previous empires. The same will happen here. Its just a matter of time, of which could easily take very long considering literally every country on the planet is doing it. To quote several people I have read articles from over the last several years. “It will work until it dont” Then its the end game.

Here is some food for thought with some quotes from articles I read today.

Whether as a result of an unprecedented scare campaign by the Swiss National Bank (most recently reinforced by Citigroup), or due to confidence that Swiss gold is as safe abroad as it is at home, or simply due to good old-fashioned “hanging chads”, today’s most awaited event has come and gone and the result – according to early projections by Swiss television SRF – is that the Swiss population overwhelmingly rejected a referendum to force the Swiss National Bank to hold some 20% of its reserves in gold in a landslide vote, with about 78% voting against what AP politely termed”protecting the country’s wealth by investing in gold.”

This one was kind of funny and seems as though the Dutch decided on a different approach to protect their gold before the dupes at the bottom realize that for every ounce of gold sitting in most central bank vaults around the world. “There are literally 60 paper clams on that ounce of physical gold” Talk about a heavy pyramid scheme. I would hate to be one of the 59 that dont get their gold when they want delivery.

Here is a chart from the Fed showing what the Netherlands did.

Dutch take delivery

 

Referendum Fails, EUR/USD Gaps With Gold

Its not surprising that Gold would gap down on the news of the failed referendum, however I have my doubts that there is any real strength in the Euro because of it. We do have a first push to the downside even though I never like it when they push like they did on this pair. We also have both the London and NY sessions Friday agreeing on conviction to the downside so I will have a bias for the next push down today. The best level is up at the gap high of 1.2463 but there is a small chance that they only go to 1.2448 if they leave the Asian box at its lows. The set up will need to be very nice due to the added risk at the lower level. I will be open for the long at Fridays lows but will need quite a bit to change the bias in the form of a great set up, preferably a stop run, and low risk entry just in case.

EUR/USD Hourly chart 12-1 2014

 

GBP/USD Starts Third Push Early

The GBP/USD made the clean second push down Friday so I will be bias for the short here today also. They did get an early start in Asia this morning so I will be looking for the backside entry at either 1.5648 or the 1.5618 if they can hold below and get a clear set up during the London session. They have been beating these lows for most of November but if they can make the break down then the door is open to 1.5500 or lower.

GBP/USD hourly chart 12-1-2014

EUR/JPY First Push From Range

The EUR/JPY making the first push from the range makes me bias for the long on this pair. It will need the USD/JPY to help but looks like its getting it during the Asian session this morning. Its already gaped above Fridays highs which is a good sign but hasn’t quite closed it yet so may do it during the London session today on Euro weakness. Having said that, if we do see more Euro weakness then this pair wont do much if they push the UJ while the EU slides with the bias I have for it today. I will be open for the short at the gap highs but its doubtful unless the UJ conviction to the upside fails.

EUR/JPY hourly chart 12-1 2014

 

Forex News Today

The calendar starts with Manufacturing PMI from most of the Euro Zone. With Germany sitting right at the 50 level a drop below will be significant and get the Euro pushing down but large misses on the French, Italian or Spanish figures could get them going as well. The UK also has its Manufacturing PMI data expected to drop a little but will need a larger miss to the down side to create much movement, otherwise I dont see much probability for a surprise better than expected but could happen. If it does the reaction will most likely be taken up in the EUR/GBP and the GU pullback a bit before finishing the third push.

The US has ISM Manufacturing PMI as well expecting a decent drop so will not need much of a disappointment to cause a little USD weakness. However with the Swiss referendum failing I expect the USD strength to continue for awhile anyway due to there being little other choice when it comes to avoiding risk. Later Fed member Dudley speaks but I have my doubts he will be saying much that differs from any other recent speeches.

Aussie traders have the RBA Rate Statement and Statement tomorrow morning so it would be best to avoid entries before the release since they do have a habit of surprising.

Happy Trading

Chad

MY APOLOGIES FOR THE BROKEN VIDEO OF INSIDE JOB IN THE COMMENTARY. I DIDNT THINK I WAS COPY WRITE INFRINGING WITH AN ITALIAN VERSION ALREADY ON YOUTUBE. HOWEVER YOU CAN STILL WATCH IT AT THIS LINK. STILL A MUST SEE!

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