Always Surprised

This particular oddity seen among Currency ETFs never fails to amaze me, I know (I think we all do) that the market is manipulated, but the skill in which some of these currency ETFs seem to be manipulated with, even over a long 3 day weekend is absolutely astonishing to me.

Whatever the Euro was worth during European trade yesterday as the US was closed, it didn't effect the currency ETFs like FXE or UUP (Euro and $USD respectively) until the US markets opened today, what is astonishing (if it was just seeing it a couple of times I would chalk it up to chance, but it is a consistent feature with these ETFs) is the fact that divergences from 3 days ago on Friday are being put in to motion within hours of the US open, regardless of what was happening since currency trade opened this week Sunday. It is as if the divergence is there and the currency will move to reflect that divergence only when the ETF is open, it's a sort of invisible hand.

Take a look at the EUR/USD pair which I described last night as effective in short term trade, but not a particularly good pair as a leading indicator.

Although we aren't thus far seeing the same level of legacy arbitrage ($USD related) that we saw on Friday and I doubt we will as humans come back from the Hamptons, we are seeing some movement in $USD (by proxy EUR) sensitive assets.

 Since last night when the EUR was near Friday's intraday highs, it has seen a fairly sharp sell-off since the European opening this morning.

 Here's a closer look at the EUR/USD.

Here's where it gets strange and as I said, I wouldn't mention it if I had not seen it with such regularity.

 Euro on Friday gaps up with a leading negative divergence on the 1 min chart.

 Also the 2 min chart

 The trend with a leading negative position on the 5 min chart as of Friday as well as almost the last 2 weeks, which is interesting when one considers the arbitrage action, the light volume, the ease of moving the Euro on Macro-rumors, etc and the hedge fund re-allocation to defensive sectors over the last month.

The $USD on the other hand as represented by the UUP ETF...

 Leading positive on Friday (2 min)

 Also on the 3 min

 The 5 min with several weeks of positive positioning.

The 15 min with nearly a month of positive positioning in to lower prices.

And finally the 60 min trend seems completely unfazed in 3C while price pulls back to an exact break of support late last week.

We can get in to the reasons later, the behavior is the point of the post.