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Sir Pipsalot's EUR/USD trading thread (kept current)

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Dec 12, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Instead of having new threads with every update, since I most closely follow the EUR/USD, I will keep all EUR/USD thread analysis in this thread and update it when needed. This is mainly for medium to longer term trades, but short term stuff comes up as well. My analysis from 11-22, 12-2, and 12-6 are still quite valid, so I will start with that and build off of it. This top post I will edit to keep current, while replies to this thread will show a chronological presentation of analysis:

    My current position trade initially entered short EUR/USD at 1.3750 on Sunday 11-21, some profit taken, and resold more with limit orders around 1.3300 and 1.3400 on Friday 12-3 and Tuesday 12-7. My final TP currently stands around 1.2480, although I may change that with a future update. Read the posts below to catch up on my trade and my analysis of the EUR/USD to learn the context for future updates.

    Quick EUR/USD update 12-14:

    We saw a rally and clear break up through the top of the wedge for a breakout long, but it looks a lot more like a short squeeze to me than a reversal. I expect as the week pushes on that the rally will fizzle and turn lower, so it's a good price to sell into the rally (1.3350 and up) from a position trading standpoint, but for short to medium term trades, I'd hold off until after the FOMC statement later today.


    EUR/USD analysis (tipping point) Update Sunday 12-12-2010:

    Right now the EUR/USD is coiled up pretty tightly after last week's rangebound action. We've sold off from the 1.3280-1.3380 sell range from last week (now 1.3197) and have worked into a wedge on the hourly chart. A break to the south of the blue line (see chart below) should see at least 50 pips lower to the pink channel line. A break of the pink would mean a very likely selloff to either the red support line, or the Nov 30 lows around 1.2970, whichever comes first. Conversely, the upside risk grows with a break above the purple channel resistance line shown.

    [​IMG]

    Any short to medium term trades or tigher SL short EUR/USD trade ideas are probably best putting a SL either just above 1.3283, or a bit above the purple resistance line shown (now 1.3245). Yellow lines are alternate options for sloping resistance, but I like the purple line best, while dotted yellow lines are key fibonacci levels.

    As for new trades, I'd consider selling short term near yellow or purple sloping channel resistance, or on a clear breakout of blue or pink channel support. Since I'm already plenty short though, I'm going to focus on taking partial profits on my current long term trade which I will do next a bit above the pink support line.
     
    #1 Sir Pipsalot, Dec 12, 2010
    Last edited: Dec 14, 2010
  2. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    EUR/USD analysis (trade setup) from 11-15-2010:

    It looks like the EUR/USD played out post-FOMC like I had suspected all along... it turned into a selloff. The initial rally afterwards was indeed shortlived, and the EUR/USD looks poised for a more substantial selloff even after the 500-600 pips we've seen so far. I'm not in short yet though, as I am waiting/hoping for a bit more of a bounce up from here (currently 1.3675). My plan is to get short somewhere between 1.3760 and 1.3900 to position for a selloff down to the 1.3300's initially, 1.2800 eventually, with a small possibility of a complete reversal to new 2010 lows below 1.1890.


    EUR/USD analysis (trade entry) from 11-22-2010:

    Right now, the biggest thing I'm looking at in forex is to short EUR/USD on this rally. My plan from last week as you might remember, was to short EUR/USD between 1.3760 to 1.3900 and that plan remains relatively unchanged with us now at 1.3761 just shy of the 38% retracement of the November selloff. Because I'm looking for at LEAST a selloff to 1.3300, I'm going to throw a SL of 1.4000 on this trade, with an initial TP of 1.3370 and potential further TP's of 1.2930, and 1.2480. I do feel EUR/USD has some potential for an even bigger selloff to new lows below 1.1891, but if that's the case, I'd rather grab an earlier piece of it, then look to get in another trade short later if the odds improve.
     
    #2 Sir Pipsalot, Dec 12, 2010
    Last edited: Dec 12, 2010
  3. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    EUR/USD analysis (profit taking and resell setup) from 12-2:

    I've continued to track this move on the EUR/USD and believe it may be setting up for a good "sell on rally" type opportunity here in this retracement phase. For those who missed the short trade I entered around 1.3750 last Sunday/Monday, it looks like the next key area to sell EUR/USD is the 1.3280 to 1.3380 range, but possibly as high as 1.3470. This bounce is very likely to be a retracement, not a reversal, so a rally retracing somewhere between 38 to 50% of the sell off from Nov 22nd is the likely target; however, sometimes the EUR/USD finds a way to manage 61.8%.

    It's a good time to take some profits on shorts (if you haven't already... now around 1.3100) and consider reentering at a higher price. Or if you're not in, consider initial entry as described. Either way, I'd look to sell initially around 1.3280, adding more around 1.3375 and use a SL somewhere a bit above 1.3470. You could try small limit order scalps at those levels with 20-40 pip TP/SL, or use those spots as entry to build or add to a position trade as I am... or consider each a separate swing trade... it's really up to you based on your style of trading.

    As always though, it's possible I'm right about the continued downtrend, but wrong about the subpattern, so I continue to hold the planned portion of my position trade short from 1.3750 looking for another 600 pips or so from here. My medium to long term bearish outlook remains undeterred thusfar and in fact, strengthened by the price action over the last week and a half.
     
    #3 Sir Pipsalot, Dec 12, 2010
    Last edited: Dec 12, 2010
  4. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Update to 12-2 analysis (resells entering) posted on 12-6:

    Looks like we worked well into my sell region ("1.3280 to 1.3380 range, but possibly as high as 1.3470") here on Friday and Sunday/Monday topping out around 1.3430 late Friday. It's now showing signs of reversal and is a clear long term sell here in the low to mid 1.3300's as I highlighted last week.
     
  5. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    EUR/USD analysis (tipping point) Update Sunday 12-12-2010:

    Right now the EUR/USD is coiled up pretty tightly after last week's rangebound action. We've sold off from the 1.3280-1.3380 sell range from last week (now 1.3197) and have worked into a wedge on the hourly chart. A break to the south of the blue line (see chart below) should see at least 50 pips lower to the pink channel line. A break of the pink would mean a very likely selloff to either the red support line, or the Nov 30 lows around 1.2970, whichever comes first. Conversely, the upside risk grows with a break above the purple channel resistance line shown.

    [​IMG]

    Any short to medium term trades or tigher SL short EUR/USD trade ideas are probably best putting a SL either just above 1.3283, or a bit above the purple resistance line shown (now 1.3245). Yellow lines are alternate options for sloping resistance, but I like the purple line best, while dotted yellow lines are key fibonacci levels.

    As for new trades, I'd consider selling short term near yellow or purple sloping channel resistance, or on a clear breakout of blue or pink channel support. Since I'm already plenty short though, I'm going to focus on taking partial profits on my current long term trade which I will do next a bit above the pink support line.
     
  6. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Quick EUR/USD update 12-14:

    We saw a rally and clear break up through the top of the wedge for a breakout long, but it looks a lot more like a short squeeze to me than a reversal. I expect as the week pushes on that the rally will fizzle and turn lower, so it's a good price to sell into the rally (1.3350 and up) from a position trading standpoint, but for short to medium term trades, I'd hold off until after the FOMC statement later today.
     
  7. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Quick EUR/USD Update 12-15:

    With the relatively uneventful FOMC yesterday and the subsequent reversal lower on EUR/USD, the stage is set for the EUR/USD downtrend to resume in force, so if you were waiting to short, now's the time at 1.3300 or above.
     
  8. Doc Popsy

    Doc Popsy Recruit

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    Pipsalot, where are you?

    Hi Pipsalot, perhaps you do not know some of us out here do not let a day go without visiting your thread. For several days now, you have been off the thread. What's wrong? Where are you?
    Ak
     
  9. momo23

    momo23 Recruit

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    Hi Pipsalot, I share the same view as AK and have been visiting your thread everyday.
    Please let us know where we can read your daily posts...if you are still posting....Rita
     
  10. PipDog

    PipDog Corporal

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    Pipsalot Got Whacked

    I'd say Sir P got whacked very hard by his extreme bearish sentiment on the SP index. He made some decent calls on the EURUSD, but found out the hard way that the market can remain unreasonable longer than investors can remain solvent. I actually agree with Sir's sentiment...it's just that the Fed has simply too much in their arsenal to bet against.

    I do believe that Sir will be proven correct at some point. The big question is: "When?". Sorry, no easy answer there.

    I hope that there were not any of us individual investors out there that took Sir's advice too long. If so...OUCH!!!!
     

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