Cross-Eyeing: EURGBP – Close Open Orders

Close Orders: 2010-04-27 23:10

PoD Chart

Sadly, euro weakness stemming from Greece and Portugal debt concerns hit the news wires waaaay too soon, causing the EURGBP to fall much earlier than I initially expected. Since my trade idea is now invalidated, think it’s time to close any open orders that I have.

This doesn’t mean that I’m letting go of my bearish stance towards the euro though. With the said, I’ll continue looking for ways to short the euro, especially against the dollar and the yen. Stay tuned!

Trade Idea: 2010-04-26 23:21

PoD Chart

On the technical side of things, it seems that a falling trend line has formed on the 4-hour chart of the EURGBP. Notice how the pair is forming lower highs, while at the same time, it is making major lower lows. With that said, I think the pair could head lower, and it’s just a matter of picking a good entry point.

Popping out my Fibonacci tool, it seems that the pair might experience potential resistance around the 0.8700-0.8715 region, as it lines up with a previously broken support level. Remember, whenever price passes through a significant support level, that level becomes resistance. By the time price reaches this level, I suspect stochastics would hit overbought territory, giving me the additional confirmation I need to take a short trade.

I placed my stop slightly larger than the pair’s average true range, putting it above the 61.8% Fibonacci retracement level and the falling trend line. I’m ultimately targeting 0.8500, but I will take some profit off once price hits the previous week’s low around 0.8615.

Fundamentally, the euro is still looking weak even if Greece is already in the process of securing its bailout funds. Just yesterday, Germany declared that they wouldn’t lend a helping hand to Greece unless it comes up with a solid plan to solve its debt problems. Aside from that, economic reports due from the euro zone today could push the euro lower. Germany is set to release its GfK consumer climate index, which is estimated to climb from 3.2 to 3.4 in April.

Later on, the UK will release its CBI realized sales report, which could show an improvement in consumer spending. After dipping from 23 to 13 in March, the reading for this month is expected to rebound to 16.

Again, here’s my plan:

Short EURGBP 0.8715, pt1 at 08615, pt2 at 0.8500, stop at 0.8815. As usual, I’ll be putting 1% of my account on the line.

For those who watch the NBA, the Magic just swept Jordan’s Bobcats to be the first team to move into round two. Will the Cav’s be the second team to do so? Hmmm…

By the way, don’t forget to hit me up at MeetPips.com!

  • fed

    great setup, I am waiting for that price as well for a short…

  • fed

    great setup, I am waiting for that price as well for a short…

  • winningpips

    dude, nice plan… too bad I think yesterday Euro was so bearish that it did not hit your 0.8715 but it went south after touching 0.8698. Do you plan to short this pair anymore? Good luck!

  • winningpips

    or you short at 0.8715 before? congratulations! Learned something, thanks!

  • Cyclopip

    Thanks for the comments!

    Unfortunately, my trade didn’t get triggered yesterday and I just missed out. The euro took quite a hit across the board, and the EURUSD just hit a new year-to-date low. I’ll probably be closing this trade and be looking for another setup in another pair.

  • winningpips

    dude, nice plan… too bad I think yesterday Euro was so bearish that it did not hit your 0.8715 but it went south after touching 0.8698. Do you plan to short this pair anymore? Good luck!

  • winningpips

    or you short at 0.8715 before? congratulations! Learned something, thanks!

  • Cyclopip

    Thanks for the comments!

    Unfortunately, my trade didn’t get triggered yesterday and I just missed out. The euro took quite a hit across the board, and the EURUSD just hit a new year-to-date low. I’ll probably be closing this trade and be looking for another setup in another pair.