Cross-Eyeing: EUR/CHF – Trade Closed

Trade Closed: 2009-05-07 13:55

Today’s events was what I was waiting for: the ECB cuts rates from 1.25% to 1.00% and announced purchases of up to EU60 billion in euro-denominated covered bonds. So, an interest rate cut and “quantitative easing” actions and what does the euro do? Spike higher!

Needless to say that my trade was finally stopped out and I took a small hit after waiting for so long!

Trade stopped out at 1.5160

Total: -150 pips/ -1.0% loss

The market took the fact that it was a “small” QE initiative – at least compared to what the UK and the US is doing to help their economies and traded it as a positive sign.

So, the breakout never really happened and neither did a sell off on the euro, even on a rate cut and QE. I really don’t know what to say but, “that’s the markets and anything can happen!” Haha. At least I managed my risk and didn’t lose more than 1%.

No further trade ideas for the week, but I am watching EUR/JPY and how 132.50 – 133.00 has held as resistance in recent weeks. Maybe I’ll give it a look next week, but until then have a great day!

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Trade Update: 2009-05-05 13:37

Good afternoon Forex fanatics! I’ve been holding EUR/CHF short for about week not and the pair has pretty much gone no where! But that may change as the pair bounces lower from the falling trendline drawn – back below 1.5100. With the ECB interest rate decision coming up and expectations of a rate cut, I think we may see downside pressure in the short term ahead of Thursday. This may bode well for my short position in EUR/CHF and finally see a REAL break below support. So, I will hold for now and see where price action takes me this week!

Stay tuned for further updates!

Trade Idea: 2009-04-27 19:09

crosseyed chart

Good afternoon! There is a simple chart pattern forming on the daily EUR/CHF. Does the falling triangle signal a sell off in the Euro against the Swiss Franc? Let’s take a look…

Again, I have the daily chart up and a descending triangle is forming on EUR/CHF. This is a bearish signal as we have tentative buying around 1.5060 and as soon as the pair moves higher we get progressively more sellers and possibly a breakout lower. This is a simple play, and if price action breaks previous day’s lows, I will short and go for support around 1.4735.

We may see a return to the downside in this pair on risk aversion as economic data continues to show global economic weakness. On top of that, we have the “swine flu pandemic” fears, but I think until we see something more concrete on the potential damage it could do, markets won’t pay much more attention to this event. We’ll just have to wait and see on that. Lastly, there is speculation that the ECB may cut interest rates one more time at their next meeting. This sentiment could put downward pressure on the pair in the short term.

Again, I will short if the pair breaks previous day lows. My stop will be a conservative 160 pips – almost two times the average daily range of 95 pips.

Short EUR/CHF at 1.5010, stop at 1.5160, pt1 at 1.4860, pt2 at 1.4600

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

Stay tuned!

  • avedis1

    I still see it as a decending triangle. I went short at 1.5047 and with no major news on EUR or CHF I still see the potential to the down tread. What are your thoughts? Thanks, Avi

  • avedis1

    I still see it as a decending triangle. I went short at 1.5047 and with no major news on EUR or CHF I still see the potential to the down tread. What are your thoughts? Thanks, Avi