

Finance geeks: what's behind this odd chart? - davidw

This is strange looking:<p><a href="http://finance.yahoo.com/q/bc?s=EURUSD=X&#38;t=5d" rel="nofollow">http://finance.yahoo.com/q/bc?s=EURUSD=X&#38;t=5d</a><p>Not the fact that it's trending downward, but the very regular looking stairstep each day. Any idea what that is?
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nostrademons
Your link goes to the 1 year chart, but I think you meant the 5 day chart. I
dunno how to hotlink to specific ranges in the new Y!Finance charts; viewer
should click on 5D.

Anyway, the stairstep is at 4:00 AM GMT, which happens to be midnight EDT. I
don't know about the intricacies of currency markets, but I'd imagine there's
some sort of daily currency balancing where the main banks buy all the
currency they need to settle international transactions on behalf of
customers. Note that there's a sharp gap downwards between 9:00 PM and
midnight GMT (when European banks would presumably be buying dollars to settle
international transactions), and a sharp gap upwards at midnight EDT (when
U.S. banks would presumably be buying euros to settle international
transactions.)

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kingkongrevenge
This pattern is anomalous. It cannot be explained by normal daily activities
because it does not happen every day, just for the last five.

~~~
nostrademons
Is there a way to get historical intraday data for currencies, beyond the last
5 days?

I'm just going by what the data shows - this is a plausible explanation given
the times and known facts about the domestic financial system. (For example,
domestic banks have the balance all deposits daily to ensure they meet reserve
requirements.) If you can find data that refutes this hypothesis, be my guest.
Simple assertions don't count, though.

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Keios
The currency markets work 24 hours. Yahoo plots the intra day voltality but
the graph that yahoo shows in that link does not chart all 24 hours and that
is why you see a break which causes it to look like steps. The steps are going
down because the currency seems to be on a downward trend.

~~~
nostrademons
I think he was really asking about the 5-day chart, which has a large
stairstep _upwards_ at 4:00 AM GMT on each day. The date range parameter
apparently doesn't hotlink very well on Y!Finance.

~~~
davidw
Exactly.

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dpapathanasiou
Market prices as fractal patterns? Where have I seen that before?

Ah, yes, here: [http://www.amazon.com/Mis-Behavior-Markets-Fractal-
Reward/dp...](http://www.amazon.com/Mis-Behavior-Markets-Fractal-
Reward/dp/0465043577/ref=pd_bbs_sr_1/105-3399981-1108425?ie=UTF8&s=books&qid=1187279234&sr=8-1)

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ggruschow
Yahoo's data appears to be messed up. Maybe screwed up the trade date when
dealing with different timezone... or something. Here's another couple free
charts you can verify against:

[http://chartsrdc.cme.com:443/cs/charts.jsp?_quickEntry=6E1%2...](http://chartsrdc.cme.com:443/cs/charts.jsp?_quickEntry=6E1%21&_symbol=6E&_month=1%21&_period=intraday&_size=large&_barType=Lines&_density=high&_selectedIndicators=&_availableIndicators=&_submit=Get+chart)
<http://www.dailyfx.com/charts/ChartStation.html>

I realize the first is futures, but they match the spot market extremely well.

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joe
Switching from the 5 day view to the 3 month view, you tell me what's behind
_this_ chart, and I'll be impressed:

[http://finance.yahoo.com/q/bc?s=EURUSD=X&t=3m&l=on&#...</a>

~~~
jakehow
The central banks are flooding the markets w/ currency right now to try and
bail out the banks who took on bad debt.

The European central bank floated more currency(~100bn) than the Fed
did(~60bn), so I think that is why the dollar gained a little on the Euro over
the past few days.

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joe
I'm impressed. :)

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eposts
Interestingly I was looking at this chart and then came to news.yc and saw
your post. I don't understand your question. Are you asking why there are lows
and highs for each day? It is because the its traded just like stocks are
traded and have intra day lows and highs.

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davidw
Ok, but why the odd looking stairstep?

[http://finance.yahoo.com/q/bc?s=%5EDJI&t=5d](http://finance.yahoo.com/q/bc?s=%5EDJI&t=5d)

Is not nearly so regular.

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kingkongrevenge
It's the "plunge protection team" at work.

~~~
byrneseyeview
If your choices are "The world is complicated," or "The world is simply
controlled by powerful, evil forces," why would you choose the latter?

~~~
kingkongrevenge
I don't know if the PPT is doing anything with the USD-EUR, I was only being
cute. But if you're implying the PPT does not exist and is not active, you are
naive. Its existence is fact. The evidence for its manipulations in the past
is overwhelming.

"State Sponsored" manipulation of currencies explains a lot of weird forex
chart patterns. It's hardly a secret that the BoJ manipulates the Yen, for
example.

~~~
nostrademons
<http://xkcd.com/258/>

