EURUSD Selling Opportunity Weekly Bollinger Band Touch

I am a breakout trader and I am a range trader, which strategy I use depends on the situation. With the way I have my Bollinger Bands set up, I rarely see a touch on these, and when I do, I take the opportunity. I do have a stop here on this sell, but it is well above 1.38 which I think would be the next resistance area on EURUSD as the currency has now made a new high for 2013. I am selling at 1.3760, with the objective to be decided over the next day or so, should my stop hold. Should price reverse in the next day and start heading lower this makes for a decent swing trade setup. As a supporting factor, the RSI on EURUSD is not matching the recent strength of price action, therefore, this could be the start of a bearish divergence signal.

USD/CHF Update

Last few hours look semi-constructive USD/CHF to go higher:

More USD data in the next hour could change this very quickly, but an attempt to break 0.9130-40 resistance may occur in the next few hours.

16:09 Update...up to 0.9129/27 near end of day.

USD/CHF Attempting Retrace above 0.9100

EUR/USD has fallen from the highs this morning on worse than expected IFO data, and is now below 1.3500 again, as this pair is inversely correlated to USD/CHF, the latter is moving up off of it's lows of .9080 from two days ago. 60 Minute chart:

Any long positions would probably want to keep a relatively tight stop below 0.9180-70, but an earnest breach of the 0.9100 handle would probably invite more sellers and stop-loss selling for a target of 0.90 or lower. On the other hand, a move above 0.9120 would target the 0.9130-35 highs of September 23, 2013, beyond which we have 0.9175 or the 0.250 %  Fibonacci retracement of the post FOMC drop from September 18, 2013 after the lack of Fed Tapering in September was announced. Going long here makes sense if 0.9130 is taken out convincingly for a move back above 0.92 in the next day or two. I am long from 0.9110 with a small position.

EUR/USD Report August 16, 2012

I have been trading mostly with the YEN crosses in the last month and a half, through which I have had my best month ever. I wanted to take a breather from the volatility and decided to play a bit with the EUR/USD and also with the GBP/USD. I have found a possible bullish signal for EUR/USD, provided any bad news is limited in the next day or so. Looking at the 240 minute chart, there is a trend-line beginning in July:

If the July trend-line (starting July 24 lows) holds @ 1.2250/60, then there may be a bounce targeting 1.2400/50 depending, but if that line breaks, 1.2150 (Aug 8, 2012 lows) would be the first target of a move down. There are no guarantees either way, so be careful with your account and take responsibility for your own actions.

EUR/USD Mid-Asia Session Update

Slept through half of the New York session to wake up and have lunch with old friends, after which I watched the afternoon price action which was about as exciting as watching paint dry; from the moment I crashed (after the German data came out) to when I woke up, the price had moved against me by 50 pips and then bounced back to my break even.

I notice that lately Asia seems to be the catalyst for what happens and has been leading with trend establishing moves that are followed in the other two sessions; a demonstration of the economic power shift, or the normal Asian session break-out tendancy re-emerging? A bullish move on risk assets has manifested now in Asia, but price is now hesitating at present levels. EUR/USD moved up above the key 1.4100/1.4110 to reach a high of 1.4132 before being pushed back down to 1.4120/25 where it is now loitering. Short of my first target I have unloaded one of my contracts already, and moved the other 3 in such a way as to lock in enough pips to make this my first 1000 pip (what can I say, I think in round numbers like most people) monthly gain. I will trail my stops manually if we get another squeeze higher, but I anticipate the trading day to be characteristically nutty for the end of the month flows and option plays, so I imagine that my stops will be taken out at a profit soon. In light of the mixed fundamental data from Europe, the IMF declaring that the euro is "overvalued", and of course Goldman Sachs advising the closing of all Long positions in EUR/USD, I think any further upside may be capped at either 1.4140/50 or 1.4180/90, but I cannot predict the future. Part of being a consistently successful trader is knowing when to lock in profits at levels where you are comfortable, leaving a bit of wiggle room for additional gains, but not leaving so much that a reversal will leave you shaking your head about the money you left on the table. As a swing-trade and a contrarian play, this has already worked out nicely. I now wish I had done my usual EUR/USD and GBP/USD long combination play, as I would have done much better. Regardless, I'm only going to be watching my positions from now till the weekend, without any intention of initiating new plays as I will be sleep-deprived once the wackyness starts. Crossing my fingers for another squeeze higher!

S&P 500 Bull Flag...but...Looking Exhausted

Classic Bull Flag on the S&P 500, but with momentum all but ground to a halt, the price is currently looking exhausted or in consolidation. I have a hunch that trader sentiment is overall bullish, and that it may move to test 1000/1010 in the next hour of trading. If there is a strong rejection of this hypothetical attempt, 990 seems to be key to the downside short-term, and 970/972 seems to be providing a base since the break to the upside on July 23, 2009.


Still holding EUR/USD Long, and it has barely moved in the time when I went to sleep last night after the German unemployment figures and woke up late this morning. The relief rally seems weak at best, but I'll have to see what Asia and early London have to say. It seems that a solid break of 1.4100 is key to the upside, and failing that, a downward correction may finally crack the 1.400. Playing this one closely now because the US GDP number is out tomorrow, combined with the end of the week and end of month usual craziness, it may not prove wise to be holding risk.

EUR/USD Late Asia Session Update

It appears as though risk was down, but not quite out, and there may be a bit more upside in the next few hours. Rumors of a 1.4000 barrier option, and some comments from the Chinese contradicting their tightening of lending policy has begun a tentative risk rally yesterday afternoon. I tried to sleep, but when price started moving up, I found that I couldn't so I guess I'm going to watch early London. In the meantime, here is a 15-minute chart of the EUR/USD.

Buying EUR/USD Near Up-Trend Support Zone / July 29, 2009 Beige Book is Less Worse

The Fed's Beige Book came out today, and although the expectation was for a very downbeat tone, the actual contents are - as I expected, less worse than expectation.

"Reports from the 12 Federal Reserve Districts suggest that economic activity continued to be weak going into the summer, but most Districts indicated that the pace of decline has moderated since the last report or that activity has begun to stabilize, albeit at a low level. Five Districts used the words "slow", "subdued", or "weak" to describe activity levels; Chicago and St. Louis reported that the pace of decline appeared to be moderating; and New York, Cleveland, Kansas City, and San Francisco pointed to signs of stabilization. Minneapolis said the District economy had contracted since the last report."

Full report:
Beige Book

Playing the contrarian angle, I am currently long for several contracts for the EUR/USD, which is trading at lows (so far) of the session and in-and-around the support zone I discussed in my last post, in anticipation of some (hopeful) short covering in the next 24-36 hours after the less-than-apocalyptic report that just hit the wires. Mind you, that I still need to do a bit more than skim the report myself. The consensus seems to be that major support comes in at about 1.3750/1.3850, and that short term support is near 1.3980-1.4000 which has held as of this posting. My stops are well below major support in anticipation for the usual risk aversion that has characterized the Asia session over the last few weeks. I fully anticipate more downward movement but so far as of 18:54 GMT (14:54 EST), the selling of EUR/USD has moderated but the risk is still palpable with the S&P hovering near 970. I am hoping to ride this as a swing trade over the next few days, with modest targets of 1.4180, 1.4220, and possibly another attempt at the 1.4300, but subject to change as always. I will be watching the chart for the next few hours to see the end of the New York session and I will be updating again soon.

240 Min (4hr) EUR/USD, 5:00pm GMT July 19, 2009

This is my 240 minute chart study of the EUR/USD, made in preparation for the upcoming trading week of July 20th-24th. Clicking on the image will make things more clear. To start off, I cannot say where the currency will be in a few hours, or days or by the end of the week, but I do have some ideas and areas of price interest. Before I get into the details of my analysis, you may want to check out this wonderful support and resistance webinar by Triffany Hammond courtesy of fxstreet.com.

Support Areas

Up Trending Support zone. Notice the pair of red trend lines starting at the bottom left hand side of the page, these start at the low of about 1.3823 reached on May 17th, 2009, and extend up to where they were tested and held on the July 8th Monthly low of about 1.3834. The reason I have used double lines for my support and resistance up-trend/down-trend lines is to include both the wicks and the tops/bottoms of the low/high candles of these zones; the idea being that support and resistance are better thought of as zones rather than specific price points. The interesting thing about this zone is that it has only been tested once unsuccessfully and has not been approached with strength since July 8th; in fact, if you look at the candles approaching this zone from July 8th onwards, you'll notice that they have very long wicks pointing down. This means that there was an attempt to drive the price down, but it was successfully repelled within the 4hr candle itself and at increasingly higher levels. This would indicate that long interest in the EUR is gaining ground and pushing support progressively higher.

1.3423 Might be considered as a potential bottom on a potential serious move to the downside, seeing as how this price held after the breakout to the upside - and resistance often becomes support and visa versa. This was also the start to the creation of the very large consolidation triangle that has formed since.

1.3775-1.3750 Should be as strong support zone. This zone starts at 1.3775 which is the 61.8% Fibonacci level of the previously mentioned breakout support starting at 1.3423 to the high of 1.4349 achieved on June 3rd which has yet to be approached since. I would consider the zone bottom to be at 1.3740/50 which is the June 15th monthly low.

1.3880-1.3910 Includes a number of interesting levels, where we have the 50% retracement from the down move from the 1.4339 to the June 15th low of 1.3748 which is 1.3896. Also there is the 50% retracement level from the 1.3423 to 1.4339 top which comes in at 1.3881. 1.3910 is included because no 4-hr candle body has successfully closed below since we came off that July 8th recent low.

1.3975 is a 38% retracement of the 1.4339 to 1.3748 June low.

1.4075 has held very nicely in the last couple days of trading on the week, and is a 50% retracement for the up move from the June low of 1.3748 to the July 1st (candle body high) of 1.4184.

Resistance Areas

Naturally we have the high of 2009 thus far coming in at 1.4339, which will probably make more sense on a daily chart, as I'm sure it's near an important Fibonacci level. This is the top of our triangle. This is also the begining of our complimentary down trendline in the double blue lines (which are actually black in this screen shot). This resistance zone was tested once and held the candle body at 1.4184 on July 1st but the wick extended up to peek about 1.4200 before being pushed back down again with strength. So far this has held but barely it seems, because once we get into the second half of July, this zone is violated repeatedly and we have even had 3 candle body closes within the resistance zone and one even above it before the price was chased back to the bottom of the zone in the last few hours of the trading week.

Key zones of resistance to the upside of the triangle:

1.4140 we have not had a 4 hour candle body close above this level since July 1st.
1.4180-1.4200 we have not had a 4 hour candle close in this zone since the early June highs. I have heard and read that this is the level to break for an indication of a return to long-term bullish momentum for the EUR/USD
1.4320-1.4340 we have not had a 4 hour candle close in this level since July 1st since 2008. This in my mind would be the zone to beat to make sure that we haven't turned the triangle into a rectangle - which I suspect is one scenario we might see until earnings season is over or the rest of the "summer correction" (I keep hearing about it but not seeing very much from the bears) is finished.

The Theme here is an ever higher series of lows with the main line of support strength being the uptrend line support zone which makes up the base of that triangle that most traders have been watching very carefully over the last month and a half. I would be able to say the same about the highs being lower, but the last 2 days of trading this week has the price action working fully inside the resistance zone and even above it for significant periods above it. To me and to a lot of traders out there this looks like a bullish pennant, but I've seen many of these fail on different timeframes, so caution is advised for either short or long positions. I'm favouring a break to the upside based on the balance of data and charting analysis, but waiting for confirmation (before going long at what seems like the range highs) is a good play, i.e. waiting for a close above 1.42 on the hourly. Another play might be what I have been doing since June, which is to buy very lightly near the bottom of the triangle, in an attempt to set up a swing trade, which has the potential to turn into a break out trade if the long term bullishness resumes. Regardless of what happens, the week should be intersting, and possibly very choppy. Keeping an eye on oil, the DJIA and the S&P would be a good idea as well.

The Breakout Trade

Although my main strategy is the ranging strategy, i.e. buy when the price is at the range lows, or sell when the price is at the highs, occasionally this strategy can turn a trade with the potential of 20-50 pips into a an even better gain when the price breaks out of a range. This is off of a 15 minute chart for EUR/USD where I went long on Eur 126.91 in the hopes that it would bounce up from the session low to the 127.40 previous high. I was in this one for about 2 hours and even refused to take a profit of 30 pips when it went in my direction the first time and even saw it go back down to 126.79 (-19 pips against me), but a bit of patience paid off as it pulled up, moved past 127.00 and then sailed past 127.40 to go all the way to 128.24. I set my stop at 115 pips (out of 130), on the chance that it would break past the 128.20 resistance zone (which would be a true breakout on the hourly chart) but it didn't and retreated back below 28.00 once the market took my stop at 128.06. Not bad for 3 hours of work. As always, when I conclude a trade like this, I log out, and take the rest of the day off, lest I be tempted to put my profit on the line while I'm a bit giddy with success. Nice to end the work day at the time I would go for my first coffee break in my previous job. Mmm...coffee.