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Celebrating 50 Years of Financial FuturesThis is a Thanksgiving Special Report. Swiss Franc ( CME:6S1! ), Canadian Dollar ( CME:6C1! ), Japanese Yen ( CME:6J1! ), British Pound ( CME:6B1! ), Mexican Peso ( CME:6M1! ) In May 1972, International Monetary Market (IMM), a division of the Chicago Mercantile Exchange (CME), launched futures contracts on seven currency pairs. This was the world’s first financial futures instrument, a futures contract based on something other than physical commodities. What has made a Midwestern Exchange, known mainly for its Pork Bellies contract, a frontrunner in financial innovation? Bretton Woods System and its Collapse At the end of World War II, the United States and its allies created the Bretton Woods System. Essentially, it was a global monetary system governed by fixed currency exchange rates. The US dollar was backed by gold, at a fixed rate of $35 per troy ounce. Other currencies were pegged to the U.S. dollar. In 1955, one dollar was exchanged for 0.3572 British Pound, 4.2 Deutsch Mark, 3.3 France Franc, 0.986 Canadian Dollar, 360 Japanese Yen, 625 Italy Lire, etc. Each country was responsible for maintaining its exchange rate within 1% of the adopted par value by buying or selling foreign reserves when necessary. The U.S. was responsible for maintaining the gold parity. Its big commitment was allowing anyone with $35 to exchange for an ounce of gold at the US Treasury window. As global inflation rose sharply in the 1970s, many countries could not maintain the official peg. They responded by redeeming dollars for gold at the US Treasury window. With US gold reserve depleting rapidly and a gold run looming, in August 1971, President Richard Nixon announced the "temporary" suspension of the dollar's convertibility into gold. This marked the breakdown of the Bretton Woods. Central banks around the world were no longer obligated to peg their exchange rates to the US dollar. Leo Melamed and Milton Friedman With fixed rates, there was no exchange rate risk in international trade. However, flowing rate exposes importers and exporters to significant uncertainty to the amount of dollar or foreign currency they will receive or are obliged to pay for. Since its founding in 1898, CME has been the place where producers, processors, merchants, and commercial users come together to hedge price risks for a wide range of commodities. Leo Melamed, then Chairman of the CME, was convinced that the futures market is the solution to tackle the rise in exchange rate volatility. Leo set up an International Monetary Market division within the CME and prepared for new futures contracts derived from foreign exchange rates. Initially, this breakthrough idea found no friends on Wall Street. According to Leo, one investment bank president tossed it out saying he didn’t want the Chicago “Pork Belly Shooters” to contaminate the FX market. Leo met with Milton Friedman, a well-respected economics professor at the University of Chicago. Milton fully supported the ingenious design and published a feasibility study, “The Need for Futures Markets in Currencies” in 1971. Milton Friedman (1912-2006) won the Nobel Prize in Economic Science “for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy” (the Nobel Committee). This changed everything. When Leo went to Washington to lobby the idea of listing foreign exchange futures, Treasury Secretary George Shultz said, “If it’s good enough for Milton, it is good enough for me.” George Shultz (1920-2021) served as Secretary of State in the Regan Administration and as Treasury and Labor Secretary under Richard Nixon. He was also the Dean of Graduate School at the University of Chicago, and a good friend with Milton Friedman. If you are interested in the story of FX futures, you may find it online and at Leo’s 1996 memoirs, “Escape to the Futures”. Foreign Exchange Futures On May 16, 1972, IMM simultaneously launched seven futures contracts based on the US dollar exchange rates to British Pound ( CME:6B1! ), Japanese Yen ( CME:6J1! ), Canadian Dollar ( CME:6C1! ), Swiss Franc ( CME:6S1! ), Mexican Peso ( CME:6M1! ), Deutsch Mark and Italy Lira. Five of those original FX contracts are still actively trading at the CME. Deutsch Mark and the Lira have been delisted since Germany and Italy joined the Euro currency. The new contract, Euro/USD FX ( CME:6E1! ), becomes the most active CME FX future contract. FX contracts saw exponential growth in trading volume in the next fifty years. In the first 9 months of 2022, average daily volume for all FX futures and options reached 983,000 lots, according to the CME Group. On November 15th, Euro FX alone traded 359,000 lots and had an open interest of 683,293 contracts. My writings on TradingView include a number of trade ideas on FX futures contracts. Please take a look if you haven't yet. FX Futures were the start of a “Financial Revolution” in the futures industry. The next few years saw new breeds of futures contracts, including interest rate futures between 1975 and1977 and equity index futures in 1982. During the holiday season, I would start a series on the leaders and innovators at CME, CBOT and KCBT. They brought GNMA Futures, T-Bill and T-Bond Futures, Eurodollar Futures, Value-Line Index Futures and S&P 500 Futures to life and revolutionize the financial derivatives world as we know it today. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trade set-ups and express my market views. If you have futures in your trading portfolio, check out on CME Group data plans in TradingView that suit your trading needs www.tradingview.com
CME:6S1!Education
by JimHuangChicago
2
💵Euro/U.S.Dollar💵Analyze (Short Term, 11/15/2022)!!!Euro /U.S.Dollar was able to make Ascending Broadening Wedge over the heavy support zone. I expect Euro /U.S.Dollar will go down at least to the support zone. 🔅Euro/U.S.Dollar Analyze ( EURUSD ) Timeframe 15min⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
Euro Crash. ( Updated ) O.o We update the analysis of the Euro that we have already done on other occasions. I think it's very easy to see what happens here. - Bearish Channel, bouncing off institutional support or resistance zones, but with a dark future. Where the highest probability will be to see the Euro again at $0.85 very soon in 2023 (as we discussed in previous analyses) but also after a break of perhaps 1 and a half years of setback and relief. We will be able to live a new strong Fall until the year 2026 where we could see a Euro in values ​​of $0.75 and finally for the year 2030 a fall of up to $0.64 to $0.56. As we can see, it is NOT safe to maintain any currency other than the USD, since this is the dominant one, but the dollar does not protect us. The dollar is very damaged with a loss of more than 98% of the purchasing power of citizens over the years, but within all currencies it is the STRONGEST. - On the other hand we will be able to see that the projections for the rest of the currencies are also horrendous, with which it will not be an isolated case only for the euro. We may see a Pound (GBP) at $0.85 by 2026 and up to $0.50 by 2030 if the trend DOES NOT CHANGE. And if he hasn't done it in all these years... why should he now? - At the same time we can observe the currency of Japan (Japanese Yen) This currency seemed to be quite respected against the dollar, but that is over. We are facing a macro figure of change in trend. (A pattern known as the Inverted Headshoulder, + Bottom Round + Past Trend Break + Trend Reversal Confirmation by Breaking Previous Relative Highs) It is time to worry and go. We are about to witness a loss of Value with respect to the dollar of at least 50%, 60%, 70% and the Japanese Yen up to values ​​of 150% (in case of breaking the levels of 160) from June of the year 2021 until the year 2030
Short
by javieralcazarono
💵Euro/U.S.Dollar💵Analyze (11/02/2022)🏁!!! Euro/U.S.Dollar was able to make a Bearish 🏁Flag🏁 Pattern in a 15min timeframe. It seems Euro/U.S.Dollar broke the lower line of the bearish flag pattern. I expect Euro/U.S.Dollar will go down to the targets that I specified in my chart. 🔅Euro/U.S.Dollar Analyze ( EURUSD ) Timeframe 15min⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
2
EURUSD Monthly Forecast Movements 1-30 November 2022 EURUSD Monthly Forecast Movements 1-30 November 2022 We can see that for this month, the implied volatility is around 3.57%, increasing from 3.5% of last month. This is currently placing us in the 88th percentile according to ATR and 92th according to EVZ Based on this percentile calculation, on average the monthly movement for the candle(from open of the candle to the close of the candle) is: BEARISH Candle : 2.126% BULLISH Candle : 0.984% With this in mind we can expect with a close to 24.4% probability that our close of the monthly candle is going to close either above or below the next channel: BOT: 0.953 TOP: 1.022 Lastly, based on the calculations that we had for touching the previous candle high and low values, we can estimate that there is a : 72% chance that we are going to touch the previous monthly high of 1.0088 25% chance that we are going to touch the previous monthly low of 0.963
by exlux
💵Euro/U.S.Dollar💵Analyze (9/26/2022)!!!Euro/U.S.Dollar has been running in descending channel for about 235 days. Euro/U.S.Dollar is in the heavy support zone and near the lower line of descending channel + PRZ(Price Reversal Zone). I expect that Euro/U.S.Dollar will go up at least to the middle line of descending channel. 🔅Euro/U.S.Dollar Analyze (EURUSD) Timeframe 4H⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Long
by pejman_zwin
💵Euro/U.S.Dollar💵Analyze (10/03/2022)!!!Euro /U.S.Dollar moved as I expected ✅👇 Now, Euro /U.S.Dollar is running near the middle line of descending channel; at the same time, it was able to make an Evening Star Candlestick Pattern (reversal pattern). I expect Euro /U.S.Dollar will touch the lower line of descending channel at least. 🔅Euro/U.S.Dollar Analyze ( EURUSD ) Timeframe 4H⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will be glad to see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
Short
by pejman_zwin
2
DXY, Up to 121 ?DXY is inside a rising channel in monthly time frame and probably will reach to upper bond of channel. As it is clearly shown in monthly chart , DXY has broken long term major down trend line and there is no major static resistance on it's way up to 121 ! . The only resistance which may be able to push it down is upper bond of mentioned channel ! Can these resistances make confluence at 121? Exciting !. Daily time frame chart with focus on recent moves shows an up trend line with 5 hits with latest hit being the 5th. A bullish divergence was also formed between stochastic indicator and the chart. Unless seeing failure conditions, every evidence in multi time frame analysis is in favor of more upside move which signals more strong dollar. I hope this analysis to be helpful and wish you all the best.
TVC:DXY
by SaeedSajedi
33
EUR/USD analysis: US-EU natural gas gap narrowsRecent moves in the EUR/USD exchange rate have been driven primarily by the price differential between natural gas in the United States and Europe, rather than by the ECB's historic rate hike last week. Over the last 90 days, the correlation coefficient between EUR/USD and US-EU gas price differentials is 0.88, indicating a very strong relationship between the two variables. The price of gas in Europe has decreased drastically over the course of the past week, with the Dutch TTF benchmark falling by nearly 40% from its highs of €330/Mwh to its current level of €190/Mwh. This was aided by higher-than-expected EU gas storage levels at this time of year, as well as speculation in Europe about a natural gas price cap. When measured in dollars per million British thermal units ($/MMbtu), the European Dutch TTF is around $61/MMbtu right now, or about $53 more expensive than the US Henry Hub gas price, but significantly lower than the previous price-gap peak of $92/MMbtu. The narrowing Henry Hub-TTF price spread from $92/MMbtu to $53/MMbtu has helped the EUR/USD rally from 0.987 to 1.011. What next can we expect? This week, European nations are expected to announce long-awaited energy emergency measures aimed at lowering skyrocketing gas prices and alleviating the pressures associated with a complete Russian gas shutdown. If the market sees the announcements about energy policy as bad news for European gas prices (Dutch TTF), the spread between European and US gas prices may continue to narrow, which would sustain the euro in the short term. However, despite the fact that the price difference between European Dutch TTF and US Henry Hub gas has narrowed, European gas is still nearly eight times more expensive than US gas. This continues to be a significant drag on the European growth outlook, thus capping the euro's upside potential in the medium term. Idea written by Piero Cingari, forex and commodity analyst at Capital.com
by Capitalcom
2
EUR/USD Technical BreakdownEURO / DOLLAR; Technical Breakdown (Long) So, as you can see we've had a depletion at 0.98800 where price failed to break the lows and printed a clear inverted head & shoulders After the third bounce of the trendline, I was expecting price to break through, indicating price is reversing We have clear / well respected support / resistance zones marked out, indicating where price is likely to go after breaking bearish market structure Now, for me personally, I'd like to see price come back to the golden zone between the 61.8 & 78.6 fib levels to give the best / highest probability set up whilst maximising our reward to risk You may have noticed these fib levels also line up with the trendline, a strong area of support (0.99250) as well as the neck line of the inverted head & shoulders However, This set-up isn't guaranteed, but, if price does come back to this zone, I will be looking to take buys as soon as we have 3 rejection candles on the 5m or 15m timeframe We may even have a rejection of the 0.99750 level which price has previously respected as support, but again, in my eyes, the best set up which we as traders should all wait for is the highest probability set ups which to me is the deeper pullback to that 0.99250 level. Hope you enjoyed that technical breakdown on EU. Let me know what you guys think about this pair.
Long
by TomBray1
EURUSD Euro 20-year lowIf you haven`t shorted the EURUSD here, when i was telling you that "The European Union rely on Russia for almost 38% of their imported natural gas; Germany gets about 50% of its natural gas and coal from Russia, and a third of its oil; German economy was by far the largest in Europe": The you should know that the Euro plunged to a fresh 20-year low as investors fretted about the energy crisis. Russia will not restart gas supplies to Europe through a key pipeline until western sanctions are lifted. OPEC+ unexpectedly decided to cut output in October by 100,000 barrels a day. My target for EURUSD pair is 0.9673. Looking forward to read your opinion about it.
Short
by TopgOptions