EURUSD | How willl you trade it?

Music Man · (#1 (**permalink**))

Since the peak last December of 1.51431, we have been retracing down. This last week saw the Euro close a bit above the 38.2% Fib line at 1.40714. The question on the table is do we bounce, or do we break through (as the lowest price last week did for a while) and continue down?

If we do break the 38.2% line, then the 50% line sits at 1.37345.

If it were not for Mr. Obama, I would think that the 50% retracement is the next stop. Now that O has created new risk for the buck, I am not so sure. At this rate, if Greece and the other PIIGS do not foul the well, a long EURUSD position may be just the thing.

However, with opposing bad news and the traditional risk picture muddied, a trading range will probably develop until Non-Farm Payrolls on February 5th. At that point, anything can happen, but if the perception of US holdings as politically risky grows, then bad employment numbers may facilitate a bounce back up to 1.44832, where the 23.6% fib line lies, and perhaps higher.

I'm thinking range trade until Feb 5th, then straddle, then trade the move to which ever Fib line the market heads for.

Sound crazy?

MM

ernest8fingers · (#2 (**permalink**))

Very sound thinking. If the Support is broken at any time before that date I would short this pair instantly. If not-wait for a nice run up(middle 1.40's) and then short the pair-IMO. I am very Bearish on AUD/USD at the moment due to nice slide last week and China's recent currency statements. If a move up in Eur
I would bet (lol) GBP will move up even faster before the eventual power slide south. Of course "when" is the magic answer. I am planning to trade my heart out before the 10-1 ends my Forex legacy.

Ricex · (#3 (**permalink**))

I like to keep one ear to the ground to hear what the fundamentals have to say but I try not to let it influence my decisions to much. I prefer to look at what the charts are telling me and on a daily chart eur/usd is in a down trend and has had one major retracement from the high at the beginning of december which was around the 38.2% mark. It has since made a lower low.

From that swing high to Thursdays new low at 4028 we could expect maybe another bounce of 38.2% at the 4239 area, but whatever I shall be following the trend.

According to the COT report on the $index, small speculators (us) and large traders (banks, hedge funds) are net long $. It also shows that these large traders are quite heavily short the Euro.

ernest8fingers · (#4 (**permalink**))

One thing that has helped my trading is to turn off cnbc except a few minutes before a Major news release. I still wont place a trade before a release-account suicide usually-at least from personal experience. The Charts will tell the tale and my Forex instincts will guide me-except when they dont-lol.

marcus1rex · (#5 (**permalink**))

Quote:

Originally Posted by ernest8fingers

One thing that has helped my trading is to turn off cnbc except a few minutes before a Major news release. I still wont place a trade before a release-account suicide usually-at least from personal experience. The Charts will tell the tale and my Forex instincts will guide me-except when they dont-lol.

hehehe, forex instincts!

Music Man · (#6 (**permalink**))

Today I tried to trade the existing home sales report in EUDUSD. Even though the report came in over 16% in the red, a terrible number, reaction to the news was muted. The pair did drift lower, but I was looking for a stronger move. Plus, I would have expected the move to be bullish for the Euro. Go figure.

This seems to confirm the idea that the market has already priced in negative news from the US, Eurozone and Asia, leaving us to trade sideways for a while.

MM

ernest8fingers · (#7 (**permalink**))

Quote:

Originally Posted by marcus1rex

hehehe, forex instincts!

"instincts" - that was a joke BTW-lol! and MM you are right on today about the Euro. The GBP is a ranging very nicely. New York session bids and London session offers it seems. I did lose today but only about 2 bucks. I am waiting for a top on the GBP to sell(very temporary)as traders take profit and close trades until London open. My instincts are telling me we may get to-or near 1.63 on GBP ? Anyway-Hogans Heros is almost on and that takes precedence over ALL trading.

Music Man · (#8 (**permalink**))

I made out on a few Cable trades today. Also, I looked to EURJPY and USDCHF, both of which showed some nice action. The Euro Yen is becoming a favorite as it seems to keep ranging even when the market is quiet.

I quit early, though... before the London 16:00 GMT fix. My big New Year's resolution is to always quit when I'm ahead. That sounds a little silly, but I was always getting ahead, feeling like I should quit, but going back in. Almost every time, I would then end up losing my profits. No more!

So far, it's working out much better this year.

MM

ernest8fingers · (#9 (**permalink**))

HAH! See-my instincts are not that bad after all?-lol. They have taken 5 (mostly painful)years in Forex to hone. GBP did slide along with Eur and Aud. (I only trade these pairs) and hit the 300 pip mark over all. Of course, bragging only temps fate to intervene-and fate is NEVER kind. Its the almost unendurable waiting that makes me crazy though. Yesterday I jumped into the all three pairs early/jumped out at a loss(very small) and jumped back in 20+ pips from the top of each pair. (this was ALL momentum and a little(maybe) State of the Union address effect - no News) Funny how being right once in a while seems to erase being wrong 10 times in a row-lol.

:

cowmadagan · (#10 (**permalink**))

If your arithmetic is right...I need to be right three or four times in a row...

*sigh*